(Kitco News) - As financial markets look to close the second week of the new year, gold and silver get ready to post gains, while stocks continue in a downtrend.
Among the pack of gold, silver, the dollar and U.S. stock indices, the data shows that gold provided the most return for investors during the first two trading weeks of the year. Meanwhile, stocks were clobbered with the Dow and S&P posting losses of over 8% during this period.
At the year’s start, markets were taken by surprise from uncertainty over China’s struggling economy. This gave gold and other assets a safe-haven boost, while causing volatility in equity and foreign exchange markets.
February gold futures managed to rally 4.86% to a high of $1,113.10 an ounce in the first two trading weeks of the year. By midday Friday, after a morning rally that got gold flirting again with the $1,100 level, futures were up $17.10 an ounce at $1,090.70. Since gold’s January 4 opening price, the metal has gained roughly 2.75% by 1:25pm ET.
Silver, on the other hand, didn’t get as much of a safe-haven boost. March silver futures managed to rally 4.13% last week to a high of $14.385, but have since retreated. Silver prices were last quoted up $0.167 at $13.915 an ounce, a slight gain of 0.72% from its 2016 opening price.
One major factor that has weighed on gold prices has been the strengthening U.S. dollar; however, the greenback was under pressure Friday.
The dollar index managed to rally to a high of $99.75 on the first trading week of the year, just shy of the key $100 level analysts are eyeing. However, since then, prices have fallen and were last quoted down 0.36% at $98.795. Since the start of the year, the dollar index has gained just under 0.04%.
However, for stocks, the declines are greater, with indices posting consecutive losses since the beginning of the year. Equities made waves Friday with the Dow posting losses of 500 points to levels last seen in August 2015. Since its opening price of $17,405.48 on Jan 4, the Dow has lost roughly 8.51%.
Meanwhile, the S&P hit a multi-year low Friday and posted its seventh negative close so far in 2016. Since the beginning of the year, the index has lost roughly 8.2%.
By Sarah Benali of Kitco News; sbenali@kitco.com
Follow me on Twitter @SdBenali
