Precious metals declined during November except for palladium. Gold and silver ended the month down 1.2% and 4.1% respectively. Platinum dropped nearly 8% during November and palladium rose 6.4%. Precious Metal prices began the month strong, continuing their surge which began in October amid plunging stocks and a weakened dollar. However, the dollar rallied in November, reaching a 16-month high on November 12, 2018. Gold and silver both fell sharply as a result and spent the remainder of the month playing catch-up.
The mid-term elections had a minimal effect on markets, including precious metals. The predictable outcome of Republicans maintaining the Senate while losing the House limited volatility associated with many national elections.
Stocks began November, continuing their downward path which began in October after the Fed raised interest rates and inferred that rates were still far below neutral. On November 20, 2018, the Dow and S&P 500 plunged, wiping away their gains for 2018. Stocks continued their volatile see-sawing almost daily until Fed Chair, Jerome Powell, changed his tone, stating that interest rates are just below neutral. This lead to a major rally across US equities with the Dow and the S&P 500 finishing the month up 1.6% and 1.8% respectively.
Gold also responded positively to Powell’s comments, soaring over 1% the following day to reach its highest level since early November. The dovish tone portrayed by the Fed may carry into December and continue to boost gold. December’s Fed meeting is an important one. Interest rates are still expected to rise, but the committee’s minutes will be pivotal in directing gold going into 2019.