AGE Daily Gold Update

AGE Daily Gold Update presents a recap on today's action in the precious metals markets. View archives.

3/4/2024: Gold jumps again on rate view

Source: Bill Musgrave, American Gold Exchange

Austin — Gold jumped another 1.5% to close at a three-month high above $2,126 as softening US economic and inflation data continued to fuel expectations that the Fed will pivot to lower interest rates, weakening the dollar and lifting alternative assets. The metal has rallied more than $90 an ounce in the last three sessions.

A batch of weaker US data last week is suggesting that higher interest rates are finally slowing the economy. US manufacturing retreated again in February, with the ISM index dropping to a two-month low. Consumer sentiment slipped; construction spending fell unexpectedly; and consumer spending, the engine of GDP growth, also declined.

In addition, the Fed’s preferred inflation gauge showed annual inflation falling to more than a three-year low in January. Goldman Sachs cut its Q1 GDP forecast by 0.2% to 2.2% after the data. The Atlanta Fed cut it to 2.1% from 3%.

Moderating inflation and softer data are seen as increasing the likelihood that the Fed will pivot to lower interest rates in Q2. Fed funds futures traders now put the odds of a June rate cut at nearly 70%.

Treasury yields edged slightly higher, but the dollar dipped on the shifting rate view, lifting gold and other commodities by making them cheaper overseas.

The other precious metals were also sharply higher, with silver rising 2.7% while platinum and palladium added 1.8% and 1.3%, respectively.

At the New York spot close: gold gained $30.60 to $2,126.30; silver rose 63 cents to $23.78; platinum picked up $16.30 to $904.30; and palladium advance $12.10 to $964.90 an ounce.