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Mixed Economic Reports Help Gold to Post Back-To-Back Weekly Gains

December 22, 2017 at 16:08 by Andrew Moran

Gold is glittering on the final trading day before Christmas as prices have risen as much as 0.5%. The yellow metal backyard bounce house is on track for back-to-back weekly gains as mixed economic data has prompted investors to dive into the safe-haven asset.

February gold futures jumped $5.70, or 0.45%, to $1,276.30 per ounce at 14:52 GMT on Friday. Gold is poised for a weekly gain of more than 1%, and will have advanced roughly 10% in 2017.

Silver, the sister commodity to gold, is also rallying prior to Christmas. March silver futures rose $0.14, or 0.87%, to $16.38 an ounce. The white metal is getting ready to post a tepid weekly increase. Year-to-date, silver prices have climbed just 0.5%.

Investors have renewed their interest in precious metals following a plethora of mixed economic reports. November consumer spending increased 0.6%, while orders for durable goods surged 1.3% last month. US new-home sales surged to a 10-year high, while the personal consumption expenditures (PCE) price index inched 0.1% higher to an annual rate of 1.5%. The personal savings rate plunged to a 10-year low of 2.9%.

Any gold gains were capped by a boost in the US dollar as the greenback jumped 0.21% on Friday. The Federal Reserve Note benefited from President Donald Trump signing a short-term government funding bill that allows the doors of Washington to stay open. A stronger US dollar is bad for dollar-denominated commodities like gold and silver because it makes it more expensive for foreign investors to purchase.

Because of the political turmoil in Washington and foreign tensions worldwide, many analysts are presenting bullish cases for both gold and silver heading into 2018. Some Wall Street experts also contend that the Republicans’ tax bill could offer a near-term top for the stock market, which could prompt many investors to turn to the yellow and white metals. The tax plan sent gold prices to five-month lows as the stock market roared, celebrating the reduction in the corporate tax rate from 35% to 21%.

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