AGE Daily Gold Update

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

3/28/2024: Gold has best month in three years

Source: Bill Musgrave, American Gold Exchange

Austin — Spot gold rallied another 1.2% to close at $2,217.40, near its all-time high, driven by global safe-haven demand and expectations that the Fed will begin cutting interest rates in coming months. The strong move came despite upbeat US economic data, a rising dollar, and hawkish comments from a Fed official. Silver added 0.7% to close at $24.80 an ounce.

Gold has been on a tear, ending the holiday-shortened week 2.7% higher and posting its best month in more than three years with a gain of 8%. For the first quarter, the gold price rose 7%, extending its 13% gain for 2023. Silver, more volatile than gold because of its wider-spread industrial applications, rose 0.4% this week to notch a monthly gain of 9.4% and a quarterly increase of 3.2%.

The government revised GDP in Q4 of last year up to 3.4% from earlier estimates of 3.2%, signaling solid momentum in the economy heading into 2024. The increase came from stronger than expected consumer spending, which accounts for around 70% of GDP, and business investment in factories and healthcare facilities.

Consumer sentiment rose to a 30-month high in March, according to the University of Michigan survey, as respondents expressed relief about falling inflation. The data comes two days after the Conference Board reported consumer confidence falling to a four-month low.

The consumer sentiment survey reflects how consumers feel today, whereas the confidence survey registers how they expect to feel in six months.

Fed Governor Chris Waller said the strong data and ongoing strength in the economy mean “there is no rush” to cut interest rates.” The dollar picked up 0.2% after Waller’s comments, creating a minor headwind for gold by making it more expensive overseas.

But 10-year Treasury yields, which often move in lockstep with the dollar, shook off the upbeat data and dipped a little further under 4.2% as traders continue to see the Fed cutting rates three times in 2024, with the first coming in June. Lower yields boost gold by decreasing the opportunity costs for holding it instead of bonds for safety.

In addition to expectations of lower rates, gold remains supported by strong safe-haven demand overseas because of major geopolitical tensions in Ukraine and the Middle East. And robust physical demand from central banks, as well as retail demand in China, are further underpinning the rally.

Platinum fell 1.5% today but rose 1% this week and 2.7% this month. Palladium rose 3.1% for a weekly gain of 2.3% and a monthly advance of 9.4%.

At the New York spot close: gold gained $26.80 to $2,217.40; silver added 17 cents, to $24.80; platinum picked up $11.80 to $907.70; and palladium rose $30.50 to $1,021.50 an ounce.