Strong finish – slow start

First of all, I would like to wish all readers a happy, healthy and successful new year. May all your wishes come to fruition – and may 2024 also be a year full of joy and fun.

Gold devotees, at least, may also have experienced joy in the last few days of 2023, when the price of the precious metal actually climbed significantly again during the Twixmas period. This was due to the continued slide in yields of US Treasury Bonds in particular until 28 December. Ten-year yields fell to as low as 3.78 percent – a rate last seen in July. This was due in part to the continued depreciation of the US dollar which fell to USD 1.1135 per euro – also the lowest rate since July.

However, there was a turnaround on the last trading day, 29 December, resulting in profit-taking for investors. The consensus thus far in the new year is that the markets may have reacted too quickly by pricing in the first interest rate cuts by the Fed, the Bank of England and the ECB. Some market trends of the last few trading days of 2023 actually reversed – yields are rising, as is the US dollar, which means the gold price in dollars has had to give back some of the recent gains.

It was still trading at USD 2,050 per ounce on the Friday of the week before last, and continued to climb to USD 2,088 per ounce by 28 December. Prices started to slide after that, to a weekly low this Wednesday of just over USD 2,030 per ounce. There has been a slight recovery since then, up to USD 2,051 per ounce yesterday, and USD 2,046 at the start of trading today.

The price of Xetra-Gold was also affected by the EUR/USD exchange rate shifts. Two Fridays ago it was still trading at EUR 59.95 per gram during normal trading hours. It kicked off the new year by climbing to EUR 60.75 per gram on 2 January, but then fell during the course of the week back to just under EUR 60.00 per gram. We expect it to start trading a little higher at EUR 60.20 per gram this morning. So any investors on holiday in the last two weeks have not missed much ...

Investors hope to gain some indication of the Fed's future monetary policy from the US labour market data published this afternoon, as well as the US consumer price data from December, due to be released next Thursday.

I wish all readers a pleasant – and at last hopefully dry – weekend, and a nice holiday to any readers in Hesse who may be travelling due to the week of school holiday remaining.