AGE Daily Gold Update

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

3/11/2024: Gold extends rally ahead of CPI

Source: Bill Musgrave, American Gold Exchange

Austin — Extending its record rally, gold edged up 0.1% to close at $2,188.60 despite small upticks in yields and the dollar as investors brace for tomorrow's release of the February CPI. The metal has now risen for eight straight sessions, adding more than $170 to the gold price. Silver rose 0.7% to close at $24.51.

Benchmark 10-year Treasury yields crept back over 4.1% on expectations that the consumer price index will come in a little hotter than it has in recent months, possibly shifting the narrative about interest rates once again.

Most economists project the CPI to rise 0.4% for February, the biggest increase since early fall, while the 12-month rate remains the same at 3.1%. The core rate, less food and energy, is seen slightly cooler at 0.3% for the month. Gas, transportation, and housing are the main drivers of the higher CPI forecasts.

Tracking with yield, the dollar also edged up as traders hedged against the possibility of hotter print.

Typically, rises in yields and the dollar create headwinds for gold. But recent momentum is carrying the metal, with traders feeling confident that a higher-than-expected CPI would be a blip and not derail the Fed from cutting interest rates in June. A much higher reading, though, could be a hawkish development.

Fed Chair Jerome Powell has been saying for a long time that the central bank is looking for a softer labor market before pivoting to monetary easing. While last Friday’s nonfarm payrolls report boasted a solid headline number of 275,000 jobs added in February, the prior two months were revised lower by a whopping 167,000, and the annual unemployment rate rose to 3.9%, a two-year high.

Gold is also being supported by aggressive purchases by global central banks, strong physical demand in China and India, the world’s biggest gold buyers, and ongoing safe-haven bids because of rising geopolitical turmoil.

The other precious metals were also higher, with platinum and palladium picked up 2.8% and 1.6%, respectively.

At the New York spot close: gold gained $3.10 to $2,188.60; silver added 17 cents, to $24.51; platinum picked up $25.70 to $940.50; and palladium climbed $16.70 to $1,040 an ounce.