The dollar index (DXY) rose by 0.15% on Friday, driven by weakness in the euro and yen, which fell to 1.5-week lows against the dollar. The US Dec S&P manufacturing PMI remained unchanged at 51.8, aligning with expectations. Market predictions now assign a 15% chance for a -25 basis points rate cut at the Federal Open Market Committee’s next meeting on January 27-28.
In the Eurozone, the Dec S&P manufacturing PMI was revised down by 0.4 to 48.4, while the Nov M3 money supply increased by 3.0% year-over-year, exceeding expectations. The euro declined by 0.22% against the dollar, with swaps pricing a 0% chance for a +25 basis points rate hike by the European Central Bank on February 5.
Precious metals closed mixed, with February COMEX gold down 11.50 (-0.26%) and March COMEX silver up 0.412 (+0.58%). Pressure from a stronger dollar and higher global bond yields negatively impacted metals prices despite safe-haven demand amid geopolitical risks. Notably, China’s PBOC gold reserves rose by 30,000 ounces to 74.1 million troy ounces in November, continuing a trend of central banks increasing their gold holdings.
