AGE Daily Gold Update

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

3/19/2024: Gold slips, dollar taps 2-week high

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slipped 0.2% to close at $2,159.70 as the dollar gained and Treasury yields held near multi-month highs, pressuring alternative stores of value ahead of tomorrow’s Fed decision on interest rates. Silver slid 0.5% to $24.96 an ounce.

The Federal Reserve is widely expected to hold interest rates unchanged between 5.25% and 5.5% at tomorrow’s conclusion of its two-day meeting on monetary policy. Of greater note will be the quarterly update to its dot-plot forecast of the number of rate cuts the committee members foresee as appropriate in 2024 and beyond.

Following recent data showing the US economy as more resilient than expected, along with elevated consumer and wholesale inflation reports in February, the markets have lowered their expectations about how far and how fast the Fed will pivot to lower rates.

Fed fund futures traders now see the odds of an initial cut in June at just about 50/50, down from more than 70% just weeks ago. And only three quarter-point cuts are expected in 2024, down from six as recently as January.

The dollar gained 0.2% against major rivals on the hawkish rate view, punching up to a two-week high while pressuring gold and other commodities priced in it for global trade by making them less expensive in other currencies.

The buck’s rise came despite the landmark decision by the Bank of Japan to end negative interest rates for the first time since 2007, lifting its benchmark rate to between zero and 0.1%.

Benchmark 10-year Treasury yields retreated slightly to just above 4.3%, hovering near four-month highs. High yields weigh on gold by increasing the opportunity costs for holding it instead of bonds as a safe-haven asset.

Platinum and palladium fell 2.2% and 4%, respectively.

At the New York close: gold dipped $4.60 to $2,159.70; silver lost 13 cents to $24.96; platinum dropped $20.10 to $901.10; and palladium shed $41.90 to $999.40 an ounce.