AMJ (Alerian MLP Index tracking fund),s
Gold prices notched another record to kick off the week, with spot prices touching $2100 as the global rush for bullion appears set to continue. Spot gold briefly traded above $2100 on Sun evening, setting a new all-time high. Gold futures hit an intraday record of $2152. Gold prices are on course to hit fresh highs next year & could remain above $2000 levels, analysts said, citing geopolitical uncertainty, a likely weaker $ & possible interest rate cuts. Prices of the yellow metal have risen for 2 consecutive months with the Israel-Palestinian conflict boosting demand for the safe-haven asset, while expectations of interest rate cuts have provided further support. Gold tends to perform well during periods of economic & geopolitical uncertainty due to its status as a reliable store of value. The price of gold settled just below $2100 on Fri for a record high after rising 4% last week. It briefly broke above that level when trading began again on Sun evening, before both spot & futures prices dipped slightly today. According to a recent survey by the World Gold Council, 24% of all central banks intend to increase their gold reserves in the next 12 months, as they increasingly grow pessimistic about the $ as a reserve asset. A possible policy pivot by the Fed in 2024 could also be on the cards. Lower interest rates tend to weaken the $ & a softer $ makes gold cheaper for intl buyers thus driving up demand.
Gold price hits $2,100 for record high — and analysts don’t expect it to stop there
The US economy, which is on pace to grow 5.2% in the 3rd qtr, is heading for a sharp slowdown next year, according to the nation's leading economists. "The NABE [National Association of Business Economics] Outlook Survey Panel anticipates stronger US economic growth projections for 2023 than in the Oct Outlook survey, but panelists expect growth to slow to 1% between the 4th qtr of 2023 & the 4th qtr of 2024," said NABE Pres Ellen Zentner, chief US economist at Morgan Stanley, in the group's latest survey. US GDP is expected to slow to 1.2% in the 4th qtr as tracked by the Federal Reserve Bank of Atlanta's GDP Now, which was updated on Dec 1, citing a slowdown in construction spending & manufacturing. US manufacturing registered its 13th straight month of contraction, slipping 0.9% in Nov. Much of the 3rd qtr's spurt was tied to summer travel, which hit a record, in what was described as post-pandemic "revenge travel." Also, consumers spent on experiences such as concerts, including Taylor Swift's Eras Tour, which ranked #1 by raking in nearly $800M gross, per Forbes, but these patterns likely didn't continue in the 4th qtr at the same level, economists say. Even with a slowing economy, fewer economists see a recession in the cards, with "three in four assigning a probability of 50% or less," according to the survey. On Fri, the gov's report on Nov job growth is expected to show employers added 180K positions, slightly above the prior month's 150K, while the unemployment rate is seen holding at 3.9%. The following Tues consumer inflation is expected to slip to 3.1% while the core rate, which strips out volatile food & energy prices, is seen holding at 4%. Both remain elevated but off the peak of inflation's hot streak in the summer of 2022 when the consumer price index hit 9.1%. The NABE survey also predicts inflation to continue moderating. "Panelists anticipate further slowing in core inflation — excluding food and energy costs — but doubt it will reach the Federal Reserve Board’s 2% target before year-end 2024," said NABE Outlook Survey Chair Mervin Jebaraj, director of the Center for Business & Economic Research at the University of Arkansas.
Economy to slow in 2024, economists see 50% recession odds: NABE
The 10-year Treasury yield rose as investors digested Fri's comments from Federal Reserve chief Jerome Powell & fretted over the outlook for interest rates & central bank policy. The yield on the 10-year Treasury was over 2 basis points higher to 4.245%. The 2-year Treasury yield was last at 4.608% after rising by more than 4 basis points. Meanwhile, the yield on the 30-year Treasury was around flat at 4.416%. Yields & prices move in opposite directions & 1 basis point equals 0.01%. Treasury yields fell on Fri despite Fed Chair Jerome Powell saying that it would be “premature” to confidently say monetary policy is restrictive enough & to “speculate” about rate cuts. He did not exclude the possibility of rates going higher still “if it becomes appropriate.” Powell also said that the Fed would maintain its restrictive monetary policy stance until officials are convinced that inflation is on its way back to the central bank’s 2% target. Many investors have been hoping that the Fed's interest rate-hiking cycle, which began in Mar 2022, has come to an end & that the Fed may soon begin cutting rates. They've hoping for hints about when rates may be lowered from the central bank's next meeting on Dec 12-13. Markets were last pricing in a 96.4% chance of rates being left unchanged at the upcoming Fed meeting. Investors also looked ahead to key economic data due throughout the week that could provide hints about whether higher interest rates are having their desired effect of cooling the economy.
U.S. 10-year Treasury yield rises as investors assess path for interest rates
Investors had a chance to evaluate what Powell said on Fri & now there are some worries about the future for interest rates next year. Obviously new data will guide the Fed. The extraordinary volatility in gold trading signals this is only a good time for investors who can handle wild swings in prices. Stocks had a spectacular rise in Nov without a lot of ecdonomic data to back it up. GDP growth in Q4 is looking to be limited. More caution is in order for Dec,Dow Jones Industrials
No comments:
Post a Comment