GoldPrice.

Happy Friday traders, I hope you all had a nice Tuesday, whether it was Christmas or just a random day-off in the middle of your week.

This week’s recap will be a little different—and sparser—than usual mostly because it was a very light week, in terms of data and headlines, to wrap the year. Also, because if it wasn’t for my calendar alerts, I would’ve been certain today was, I don’t know…a Tuesday? As is pretty typical for me during this week each year.

Any week that sees gold spot trading at highs going back to the summer months is worth taking a look at, so:

What Kind of Week Has It Been?

If I’m being honest, a weird one. “Weird” in a way that pretty neatly encapsulates what 2018 has been like as we come to its end. To my point: I couldn’t have predicted that I’d be talking to you about gold surging $10-15/oz (to just below $1280 at time of writing, a high-point going back six months) in the same week that we saw the Dow rip to its largest gain (in points) in a single day ever; you would also have trouble convincing me that oil’s biggest daily rise since 2016 would translate to crude trading at a meek $45/bb.

The strength of gold’s move this week (alongside silver, also having a massive week now north of $15.25/oz) looks pretty strongly tied to a US Dollar that’s weaker on the shaky stock market and persisting partial government shutdown. The collapsing of US Treasury yields correlates as well, and it will take a little more examination—in a more fluid market once the holidays are over—to be able to say which is the dog and which is the wagging tail.

While I admit that I’m looking for the next signpost to follow which way metals prices are heading, one observation that draws me a little more to the side of the gold bulls is the yellow metal’s persistence around $1278 to end the week. With the end of the year there always comes a wave of portfolio re-balancing and positioning that sends ripples through heavily-traded assets. That gold looks like it’s ending the year more than $50/oz higher than at just the start of this month, but longs haven’t been rushing to take their profits for year’s end says to me (as I bang loudly the “This Is Not Investment Advice” Gong once more) that investors are eyeing a continued move up to begin the year.  

This shortened week was not completely without worthwhile economic data, most of which pointed to a stable, if not surging, US economy. While initial jobless claims suggested a still-robust labor market, the last of this month’s housing data could be hinting at some weakening to come in 2019 but not immediately.

Overseas, an aggressive run in Euro strength back towards 1.145 was dented this morning by a disappointment in German inflation (which was already expected to drop slightly.) How the European economy as a whole manages in the first half of 2019, specifically in relation to US growth, looks to be a big story in currency (and, in effect, gold) trading in the year ahead.

So that’s where we draw the week—and for most purposes, the year—to a close. I’ll be back on Monday to preview a week ahead that will be similarly light on the calendar but with one big show stopper, as the monthly jobs report is due on Friday.

Until then, do enjoy your weekend, traders.