1. Federal Reserve governor Lisa Cook said Monday it makes sense to lower interest rates more gradually given resilience in the job market and stickier-than-expected inflation. “I think we can afford to proceed more cautiously with further cuts,” Cook said in a speech in Ann Arbor. The Fed rate cuts made since September have “notably reduced the restrictiveness of monetary policy,” she added. The Fed has now lowered short-term rates by a full percentage point to a range of 4.25%-4.50%. Cook became the latest Fed official in the new year to offer cautious commentary on the path forward for the central bank. The unemployment rate stands at 4.2% as of November. Friday brings a fresh reading on the labor market, with economists expecting the jobless rate to hold steady at 4.2%. Economists do expect to see a gradual cooling in jobs, with 153,000 jobs added in December compared with 227,000 in November. Central bank officials will also be paying close attention to inflation as they prepare for their next meeting on Jan. 28-29. The last reading of the Fed’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index showed an easing to 2.4% in November. That is down considerably from a peak of 7.2% in June 2022 but still above the Fed’s 2% goal.
2. One of the biggest bond bears on Wall Street is having a good start to the year as U.S. Treasury yields edge toward his deeply contrarian forecast. Padhraic Garvey, head of global debt and rates strategy at ING Group, sees 10-year U.S. Treasury yields trading around 5.5% toward the end of 2025, from about 4.63% on Monday. Among 51 year-end forecasts compiled, only three are for increases from current levels, and ING’s call is about 40 basis points higher than the second most bearish one. Garvey’s forecast is based on the expectation that the Federal Reserve will keep interest rates restrictive. “We have this inflation narrative, which is still north of 2.5%, we have this deficit narrative,” New York-based Garvey said via telephone. “We are quietly confident we’ll see a 5% handle.” If Garvey is correct, it will be a disappointing year for bond investors, who reaped only a small gain in 2024 despite three Fed interest-rate cuts totaling a percentage point. T. Rowe Price has also called for a 10-year yield of 5% in the first quarter of 2025 and even hinted at the prospect of an eventual rise to 6%.
3. A renewed wave of dip buying spurred gains in stocks at the start of the first full trading week in 2025. While equities came off session highs, a rally in tech megacaps put the S&P 500 on track for a back-to-back advance of almost 2%. Nvidia Corp. jumped 4% toward a record ahead of chief Jensen Huang’s speech. Banks climbed on deregulation optimism, with Michael Barr stepping down as the Federal Reserve’s vice chair for supervision. The news also fueled a steepening of the Treasury curve, with longer maturities underperforming. The yield on 30-year bonds hit the highest since late 2023. The S&P 500 rose 0.6%. The Nasdaq 100 added 0.9%. The Dow Jones Industrial Average was little changed. Lori Calvasina at RBC Capital Markets says investor exuberance in the stock market is starting to “self-correct” as a measure of sentiment and positioning fell into the year end. “While this doesn’t tell us that the recent period of malaise in the stock market is over, we do think this deterioration in sentiment is actually good news for the stock market longer term,” she wrote.
4. U.S. job openings rose unexpectedly in November, showing companies are still looking for workers even as the labor market has cooled overall. Openings rose to 8.1 million in November from 7.8 million in October, the Labor Department reported Tuesday. They were down from 8.9 million a year earlier and a peak of 12.2 million in March 2022 as the economy was roaring back from COVID-19 lockdowns. But they still exceed pre-pandemic levels. Economists had expected job openings to fall slightly in November. Layoffs rose slightly in November, and the number of people quitting their jobs fell, suggesting that Americans are less confident in their ability to find better jobs elsewhere.
5. Mortgage rates increased for the fourth straight week, inching closer to 7% The average 30-year mortgage rate was 6.93% in the week through Wednesday, according to Freddie Mac data, up from 6.91% a week earlier. Fifteen-year mortgage rates rose a single basis point to 6.14%, from 6.13%. The latest jump comes after 10-year Treasury yields, which mirror mortgage rates, rose after new economic data released this week pointed to stickier inflation and more job openings, both factors that complicate the Fed’s rate-cutting path.
6. The number of Americans filing new applications for unemployment benefits fell to an 11-month low last week, pointing to a stable labor market, though a slowdown in hiring has led some laid-off workers to experience long bouts of joblessness. Initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 201,000 for the week ended Jan. 4, the lowest level since February 2024, the Labor Department said on Wednesday. Economists polled had forecast 218,000 claims for the latest week. The four-week average of claims, which strips out seasonal fluctuations from the data, dropped 10,250 to 213,000 last week.
7. Oil prices jumped on Friday as the U.S. Treasury Department announced sweeping sanctions against Russia’s oil industry. Brent gained $1.92, or 2.5%, to $78.84 per barrel by 11:12 a.m. ET, while U.S. crude oil advanced $1.89, or 2.56%, to $75.81 per barrel. Brent broke $80 per barrel for the first time since October earlier in the day, hitting a session high of $80.75. The sanctions target Russian oil companies Gazprom Neft and Surgutneftegas and their subsidiaries, more than 180 tankers, and more than a dozen Russian energy officials and executives. The sanctioned executives include Gazprom Neft CEO Aleksandr Valeryevich Dyukov.
8. EUR/USD posts a fresh more-than-two-year-low near 1.0200 in Friday’s North American session. The major currency pair slides vertically as the United States Nonfarm Payrolls data for December unexpectedly came in higher. The U.S. official employment report showed that 256K fresh workers were added against 212K, downwardly revised from 227K. Economists anticipated slower job growth at 160K. The Unemployment Rate decelerated to 4.1% from the consensus and the former release of 4.2%.
9. The USD/JPY remains subdued after hitting a six-month high of 158.88 following the release of a stellar U.S. Nonfarm Payrolls report, which saw the Unemployment Rate falling near 4%. The pair trades at 158.27, down 0.09%. During the Asian session, Bloomberg revealed that the Bank of Japan (BoJ) is still mulling its rate decision for January and is also increasing inflation forecasts due to the softening Japanese Yen. The odds for a rate hike in January are seen as a coin flip.
A sharp selloff in some of the world’s biggest government bond markets and a surge in the dollar are sending shockwaves through financial markets. On Wednesday, 10-year Treasury yields, which underpin trillions of dollars in daily global transactions, jumped to above 4.7%. That was their highest level since April and came as UK peers hit their highest since 2008. Central banks all but declared victory over inflation in 2024, but a number of metrics show price pressures are rising again. “The start of 2025 was never going to be straightforward, considering the torrent of bond supply and policy announcements from the incoming U.S. administration,” Societe Generale strategist Kenneth Broux said. “Conditions are building for a tantrum in bonds and an overshoot in yields. We’re looking at 5% in 10s,” he added, referring to 10-year yields.
U.S. stocks plunged on Friday as investors digested a final 2024 jobs report that blew past expectations on hiring, raising more uncertainty about the path of interest rates this year. The Dow Jones Industrial Average sank about 1.5%, or over 640 points, while the S&P 500 fell 1.6%. The tech-heavy Nasdaq Composite tumbled 1.8%, leading to the sell-off. The three major gauges erased all year-to-date gains with Friday’s pullback. The 10-year Treasury yield continued a recent uptick on Friday, moving closer to 4.8% to touch its highest level since late 2023. Investors were also hit with fresh data that showed consumers are more pessimistic about future pricing pressures. According to a new reading Friday from the University of Michigan’s consumer sentiment index, year-ahead inflation expectations rose from 2.8% last month to 3.3% this month. The current reading is the highest since May 2024. Long-run inflation expectations also ticked up from 3% in December to 3.3% in January.
Global economic growth is projected to remain at 2.8% in 2025, unchanged from 2024, held back by the top two economies, the U.S. and China, according to a United Nations report. The World Economic Situation and Prospects report said that “positive but somewhat slower growth forecasts for China and the United States” will be complemented by modest recoveries in the European Union, Japan, and Britain and robust performance in some large developing economies, notably India and Indonesia. “Despite continued expansion, the global economy is projected to grow at a slower pace than the 2010–2019 (pre-pandemic) average of 3.2%,” according to the report by the U.N. Department of Economic and Social Affairs. “This subdued performance reflects ongoing structural challenges such as weak investment, slow productivity growth, high debt levels, and demographic pressures,” it said. The report said U.S. growth was expected to moderate from 2.8% last year to 1.9% in 2025 as the labor market softens and consumer spending slows.
Volatility should be expected to remain high as investors will be closely watching for hints on the upcoming monetary policy direction. Many investors have redoubled their efforts to ensure that their portfolios are sufficiently diversified in the hope that they will be able to withstand corrections in multiple market sectors. Many of these investors have included physical precious metals as part of their diversification plans, given their long history as a hedge against both inflation and during times of economic turmoil. Remember, the key to profitability through the ownership of physical precious metals is to own the physical product and hold it for the long term. Always remember that you should never overextend your ability to maintain ownership of your precious metals over the long run.
Trading Department – Precious Metals International Ltd.
Friday to Friday Close (New York Closing Prices)
| Jan. 3, 2025 | Jan. 10, 2025 | Net Change | ||
| Gold | $2,641.84 | $2,695.94 | 54.10 | 2.05% |
| Silver | $29.58 | $30.42 | 0.84 | 2.84% |
| Platinum | $942.44 | $966.44 | 24.00 | 2.55% |
| Palladium | $928.10 | $953.44 | 25.34 | 2.73% |
| Dow | 42732.13 | 41929.32 | -802.81 | -1.88% |
Previous Year Comparisons
| Jan. 12, 2024 | Jan. 10, 2025 | Net Change | ||
| Gold | $2,044.87 | $2,695.94 | 651.07 | 31.84% |
| Silver | $23.13 | $30.42 | 7.29 | 31.52% |
| Platinum | $916.01 | $966.44 | 50.43 | 5.51% |
| Palladium | $980.19 | $953.44 | -26.75 | -2.73% |
| Dow | 37593.11 | 41929.32 | 4336.21 | 11.53% |
Here are your Short-Term Support and Resistance Levels for the upcoming week.
| Gold | Silver | |
| Support | 2633/2601/2563 | 29.43/28.94/28.28 |
| Resistance | 2703/2740/2811 | 30.59/31.26/31.53 |
| Platinum | Palladiumn | |
| Support | 927/910/881 | 918/902/883 |
| Resistance | 973/1001/1034 | 953/972/1012 |