Commodity Blog

Gold finished the Christmas Eve trading session higher, but the yellow metal logged its first weekly decline in about a month. Precious metals have been monitoring the state of the US coronavirus fiscal stimulus and relief package on the last trading day of the holiday-shortened week. For now, it is a game of wait-and-see.

February gold futures rose $4.50, or 0.24%, to $1,882.60 per ounce at 17:38 GMT on Thursday on the COMEX division of the New York Mercantile Exchange. Gold prices posted a weekly drop of 0.43%, paring their year-to-date rally to below 24%.

Silver, the sister commodity to gold, will settle the session higher following a roller coaster ride on Thursday. March silver futures added $0.024, or 0.09%, to $25.945 per ounce. The white metal also recorded a weekly plunge of 1.18%.

Gold and silver found support in the uncertainty surrounding the $908 billion coronavirus stimulus and relief bill. President Donald Trump demanded that Congress raise stimulus payments from $600 to $2,000 and slash what he considered waste, such as the $10 million in gender programs for Pakistan and $800 million for Cambodia.

Democrats presented an updated version of the 5,500-page bill, but it did not include any reductions in spending. Republicans voted against the measure, arguing that the Democratic leaders in Congress have “selective hearing” because they chose to ignore the president’s demands for cutting waste.

For now, the legislation is at a standstill.

On Monday, Washington approved a $1.9 trillion government spending bill, as well as the $908 billion stimulus plan. It sparked a rally in the metals market over inflation concerns. Now that the legislation is in limbo, it might be hard for metal commodities to find support in the short-term.

In other geopolitical news, the United Kingdom and the European Union (EU) have struck a post-Brexit trade agreement ahead of Britain’s exit from the 27-nation bloc next week. The details of the 2,000-page bill are scarce, but Prime Minister Boris Johnson claims that the pact gives the UK control over its money, borders, laws, and fishing waters. European Commission President Ursula von der Leyen stated that the deal ensures the UK does not undercut the EU’s standards.

The greenback weakened on Thursday as the US Dollar Index, which measures the buck against a basket of currencies, slipped 0.05% to 90.37, from an opening of 90.41. The index will enjoy a weekly gain of 0.6%, but the DXY is still down 6.25% year-to-date. A lower buck is good for dollar-pegged commodities because it makes it cheaper for foreign investors to purchase.

In other metal commodities, January copper futures picked up $0.0155, or 0.44%, to $3.5715 per pound. January platinum futures tacked on $10.10, or 0.99%, to $1,027.20 an ounce. January palladium futures edged up $6.40, or 0.27%, to $2,345.50 per ounce.

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