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Gold and Silver November 19th 2021

Gold is steady early Friday on inflation concerns. The yellow metal is still hanging tough above $1,850 an ounce as the tug-of-war continues between investors concerned about high interest rates, which would be bearish for gold, and those worried about inflation, which would be bullish because the yellow metal is a traditional hedge against inflation.  

The precious metal lost some steam after reaching a five-month high earlier this week following a surge in consumer prices for October. U.S. consumer prices jumped 6.2% in October, the biggest increase in more than 30 years, the Labor Department reported last week.

February gold futures dropped 0.4% Thursday to settle at $1,866.10 an ounce on Comex. The front-month contract, which rolled to February from December this week, retreated 0.1% in the first four days of the week. Gold advanced 1.5% in October after retreating 3.4% in September. The yellow metal is down 1.5% so far in 2021. Currently, the February contract is down $3.80 (-0.20%) an ounce to $1,860.20 and the DG spot price is $1,858.50.

The dollar headed for a fourth weekly advance. Since gold is priced in dollars, a stronger dollar increases its cost to those holding other currencies and is bearish for the metal.

Investors continued to closely watch economic news for indicators on whether central banks might move more speedily than expected to raise interest rates in the face of escalating inflation.

Federal Reserve Governor Christopher Waller and Fed Vice Chair Richard Clarida are scheduled to speak Friday and may offer further insights.

In economic releases, the U.S. index of leading economic indicators jumped 0.9% in October, according to the Conference Board, which also signaled that growth may pick up toward the end of this year. And U.S. initial jobless claims were little changed last week, according to Labor Department data released Thursday. Applications for first-time unemployment benefits reached 268,000, down 1,000 from the prior week and slightly above economists’ estimates for 260,000.

But the threat of COVID-19 remained on the horizon, as cases have mounted in parts of the U.S. and parts of Europe were poised for new lockdowns.

March silver futures decreased 1% Thursday to settle at $24.96 an ounce on Comex. The front-month contract, which rolled from December this week, lost 1.5% in the first four days of the week. Silver rose 8.6% last month after dropping 8.2% in September, its fourth consecutive monthly decline. The metal is down 5.5% so far this year. Silver prices are tied to industrial demand. The March contract is currently down $0.045 (-0.18%) an ounce to $24.915 and the DG spot price is $24.88.

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