AGE Daily Gold Update

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

3/18/2024: Gold edges up ahead of Fed

Source: Bill Musgrave, American Gold Exchange

Austin — Gold rose 0.1% to close at $2,164.30 despite upticks in yields and the dollar as traders brace for signals from the Fed about interest rates when it meets this week. Sharply higher oil helped to lift the gold price. Silver slipped 0.4% to $25.09 an ounce.

The Federal Reserve is almost certain to leave interest rates unchanged at the meeting that begins tomorrow. But the markets are poised for any clues about the direction of policy in the accompanying statements, including an updated dot-plot forecast of how many rate cuts are likely this year.

Better-than-expected economic performance and sicky inflation during Q1 has markedly shifted the rate outlook. As many as six quarter-point cuts for 2024 were projected back in December, with the first coming March. Today, only three are expected, with the first coming no earlier than June.

And even June looks increasingly iffy, according to Fed fund futures traders. The odds of a June cut now stand at just 51%, down from as high as 73% less than two weeks ago.

Benchmark 10-year Treasury yields rose to a one-month high above 4.3%, pressuring gold by increasing the opportunity costs for holding it instead of bonds for safety. The dollar also edged up, adding 0.1% against major rivals and creating further headwinds for gold and other commodities by making them more expensive on other currencies.

But gold received support from ongoing geopolitical tensions, worries about returning inflation, and sharply higher oil prices. US benchmark WTI crude jumped 2.1% to a five-month high after Ukraine drone attacks disabled portions of Russia’s oil-supply infrastructure.

Platinum and palladium fell 2.4% and 4.6%, respectively.

At the New York spot close: gold gained $2.80 to $2,164.30; silver slipped 11 cents to $25.09; platinum lost $22.30 to $921.20; and palladium retreated by $49 to $1,041.30 an ounce.