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


2/21/2018: Gold gains, falls after Fed Minutes

Source: Bill Musgrave, American Gold Exchange

Austin — Gold edged slightly higher to close above $1,332 as traders awaited the release of the minutes from the Fed's January meeting. The metal then jumped above $1,338 after hours on the Fed's inflation view, only to slide to $1,325 on expectations of faster rate hikes.

The transcript from Federal Reserve's last meeting showed the several members expect inflation to accelerate this year and approach the target of 2%, yet only a few members think the economy is at risk of overheating. As a result, the central bank signaled that "a gradual upward trajectory of the federal funds rate would be appropriate."

Gold initially jumped on the Fed's view that inflation will pick up this year. Gold, historically, has performed best during periods of rising inflation as investors seek to hedge against loss of purchasing power.

But as traders digested the minutes, the dollar gained 0.4% on speculation that higher inflation could prompt the Fed to accelerate the pace of rate hikes this year despite the majority view that the economy is not in danger of overheating. Higher rates attract foreign exchange investment seeking higher yields, pressuring gold in turn by making it more expensive overseas.

The other precious metals were mixed before and lower after the Fed minutes. Silver closed 18 cents higher at $16.62 before retreating to $16.45. Platinum fell $8.30 to close at $996.60, then slipped another $4 after hours. Palladium slid $4.50 to $1,022.50, then slid in electronic trade to $1,016.15 an ounce.


2/20/2018: Gold drops on buck, bond yields

Source: Bill Musgrave, American Gold Exchange

Austin — Gold dropped 1.9% to close just above $1,331 as the dollar and bond yields rose, diminishing demand for alternative stores of value. It was the metal's biggest one-day decline in 14 months.

The dollar jumped 0.6% against major rivals, partially rebounding from last week's 1.4% dive as traders speculated that the expansionary policies of the Trump Administration may fuel inflation and push the Fed to accelerate rate hikes. A stronger dollar pressures gold and other commodities by making them more expensive in other currencies.

Tax cuts and the budget deal passed recently by Congress, which increases spending by $300 billion, are expected to spur an already-energetic economy nearing full employment. With inflation gathering momentum, as evident in January's 0.5% jump in the CPI, the additional stimulus has the potential push prices for retail and wholesale goods higher quickly.

Also supporting the dollar, yields on Treasury bonds rallied with the rising inflation expectations and the growing national debt, which surpassed $20 trillion this month and is projected to rise further with tax cuts and budget deficits. Short-term yields (on bonds under three years) rose to the highest levels since 2008. As the Treasury readies additional bond sales to fund the new fiscal policies, demand for US debt has softened, lowering prices and boosting yields.

The other precious metals also fell, with silver dropping 1.6% while platinum and palladium each 0.8%.

At the Comex close: April gold tumbled $25.10 to $1,331.20; March silver lost 27 cents to $16.44; April platinum slid $8.30 to $1,004; and March palladium shed $8.60 to $1,027.15 an ounce.


2/19/2018: Gold slides in electronic trade

Source: Bill Musgrave, American Gold Exchange

Austin — With many US markets closed for Presidents' Day, gold slid 0.5% to $1,349 in electronic trading as the dollar rebounded slightly from last week's 1.4% fall, reducing demand for alternative stores of value.

In thin holiday trade, the dollar added 0.2% against major rivals, pressuring gold and other commodities priced in it for international trade by making them more expensive overseas. Despite sliding around 0.3% today, the yen remains near a 15-year high against the dollar, fueled by Japan's longest period of growth in 28 years.

A team of Goldman Sachs economists, calling current US fiscal policy "charted territory," is projecting growth to be lifted by 0.7% this year and 0.6% next year by the tax cuts and budget deal Congress has approved in recent months. The impact of these measures is expected to fade after that, according to the report.

With the US national debt surpassing $20 trillion last week for the first time in history, Dan Coats, Director of National Intelligence, told the Senate that the debt is "unsustainable" puts national security at risk.

The other precious metals also fell in electronic trade. March silver dropped 0.6% to $16.62; April platinum slipped 0.3% to $1,009.10; and March palladium tumbled nearly 1% to $1,025.90 and ounce.


2/16/2018: Gold scores 3% weekly win

Source: Bill Musgrave, American Gold Exchange

Austin — Gold edged 0.1% higher to finish above $1,356, its highest in nearly three weeks, as surging import prices fueled demand for inflation hedges despite a rebound in the dollar. The metal gained 3% this week for its biggest weekly win in 19 months.

Prices for imported goods surged 1% in January, led by a sharp spike in energy costs but extending to a wide variety of products. The biggest monthly rise in six years provided yet more evidence that inflation is gathering momentum for the first time in years, fueling demand for gold.

Separately, the Commerce Department reported the trade deficit rocketed 12% higher in 2017, hitting the highest levels since 2008. Large trade deficits act as a headwind for growth in GDP.

In positive economic news, housing starts jumped to a 10-year high in January after a dismal December. And consumer sentiment climbed to its highest level in 14 years, spurred by expectations that recent tax cuts will translate into additional spending money.

The dollar bounced higher on the upbeat data, adding 0.5% against major rivals. However, the buck still lost 1.5% this week, as measured by the ICE Dollar Index. A weaker dollar boosts gold and other commodities priced in it for global trade by making them less expensive overseas.

The other precious metals were mixed for the day but higher for the week. Silver slipped 0.5% today but still gained 4% this week. Platinum added 1.1% for a weekly rise of 4%. Palladium climbed 2.9 today and 4.5% this week.

At the Comex close: April gold edged up 90 cents to $1,356.30; March silver dropped 8 cents to $16.71; April platinum climbed $11.20 to $1,012.30; and March palladium jumped $29.10 to $1,035.75 an ounce.


2/15/2018: Gold dips on profit-taking

Source: Bill Musgrave, American Gold Exchange

Austin — Gold dipped 0.2% but held above $1,355 as traders took profits from yesterday's 2.1% surge despite strong wholesale inflation and further losses in the dollar.

The Producer Price Index jumped 0.4% in January, driving the 12-month rate for wholesale inflation up to 2.7% in January. The core PPI, stripping out volatile food and energy costs, also rose 0.4%. Following a robust 0.5% rise in January's Consumer Price Index, the PPI numbers signal additional inflationary pressure in the pipeline.

The dollar fell 0.5% against major rivals, extending its losing streak to four sessions as traders shifted into the yen and Swiss franc. Yesterday's reports of declining retail sales and rising consumer inflation may signal an economy nearing the end of its boom cycle, prompting traders to prefer safe-haven currencies.

Other economic data were mixed, with the Philly Fed manufacturing index rising in February while the Empire State index fell.

Returning appetite pressured gold, with equities extending their rebound from recent corrections. All three major US indexes gained for a fifth session, with the Dow and S&P 500 both adding 1.2%.

The other precious metals were mixed, with silver dropping 0.5% while platinum and palladium picked up 0.2% and 0.9%, respectively.

At the Comex close: April gold dipped $2.70 to $1,355.30; March silver slid 8 cents to $16.80; April platinum rose $2 to $1,001.10; and March palladium climbed $9.35 to $1,006.65 an ounce.


2/14/2018: Gold surges on inflation data

Source: Bill Musgrave, American Gold Exchange

Austin — Gold surged 2.1% to finish at $1,358, closed to a three-week high, as sharply higher CPI data spurred demand for hedges against inflation.

The Consumer Price Index jumped 0.5% in January, the biggest rise in five months, behind higher costs for gasoline, health care, and rent. The core CPI, factoring out volatile food and energy costs, rose 0.3%. Real earnings decreased by 0.2%, however, as wage growth did not keep pace with inflation.

The dollar initially rose on the CPI data as traders speculated that the Fed may be more inclined to accelerate rate hikes. However, the buck reversed direction, falling to a 0.7% loss against major rivals, as falling real wages and January slump of 0.3% in retail sales undermined the case for more rate hikes.

Rising inflation without accompanying pressure to raise interest rates is a potent combination for gold, which has historically been the go-to asset to hedge against inflation. Higher rates would boost the dollar, pressuring gold by making it more expensive overseas.

The other precious metals also rose, with silver also gaining 2.1% while platinum and palladium climbed 2.4% and 1.7%, respectively.

At the Comex close: April gold surged $27.60 to $1,358; March silver rose 35 cents to $16.88; April platinum jumped $23.40 to finish at $999.10; and March palladium climbed $16.60 to $997.30 an ounce.


2/13/2018: Gold gains on safe-haven bids

Source: Bill Musgrave, American Gold Exchange

Austin — Gold gained 0.3% to close above $1,330 as the dollar retreated on deficit worries, boosting demand for alternative stores of value.

The dollar fell nearly 0.5% against major rivals as investors shifted into safe-haven currencies like the yen and Swill franc. Dollar-weakness typically boosts gold and other commodities priced in it for global trade by making them less expensive overseas. Tomorrow's release of consumer inflation data may help to underpin the beleaguered buck if it supports accelerated rate hikes from the Fed.

Concerns about President Trump's new budget also weighed on the greenback. If passed, the proposal would increase the annual deficit to nearly $1 trillion next year and $7.1 trillion over 10 years, requiring the US to go deeper into debt.

The other precious metals were mostly higher, with platinum and palladium adding 0.3% and 0.5%, respectively, while outlier silver slipped 0.3%.

At the Comex close: April gold gained $4 to $1,330.40; March silver slipped 5 cents to $16.52; April platinum picked up $3.40 to $976.20; and March palladium added $4.60, to $980.75 an ounce.


2/12/2018: Gold rebounds as dollar falters

Source: Bill Musgrave, American Gold Exchange

Austin — Gold recouped 0.8% to close above $1,326 as bargain-hunters swept in after last week's 1.6% slide. A faltering dollar also boosted demand for alternative stores of value.

The dollar slipped 0.2% against major rivals as foreign exchange traders funneled money into rebounding global equities. A falling dollar supports gold and other commodities denominated in it for integrational trade by making them less expensive in other currencies.

Equities bounced back from their worst week in two years, with the Dow jumping more than 2% and the Global Dow 1.4%, as investors cheered the $4.4 trillion budget unveiled today by President Trump. The proposal increases spending on infrastructure by $200 billion and military programs by more than $700 billion.

Bond yields rose alongside gold as investors mulled the inflationary consequences of skyrocketing federal debt and deficits. The newest federal budget, if approved, would increase the annual deficit to nearly $1 trillion next year and $7.1 trillion over 10 years.

The other precious metals also rose, with silver jumping 2.7% while platinum and palladium climbed 1.2% and 1.3%, respectively.

At the Comex close: April gold gained $10.70 to $1,326.40; March silver jumped 43 cents to $16.57; April platinum rose $11.30 to $972.80; and March palladium added $12.80, to $976.15 an ounce.


2/9/2018: Gold slides on budget deal

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slid 0.3% to close under $1,316 as Congress reached a budget deal, strengthening the dollar and reducing demand for alternative stores of value. The metal ended the week down 1.6% for its biggest weekly drop since early December.

Congress approved, and President Trump signed into law, a new two-year federal budget that increases spending by around $300 billion for military and nonmilitary programs. The agreement came after Senator Rand Paul, a deficit hawk, delayed the vote to force a brief shutdown of government in protest. According to JP Morgan, the new budget will raise the federal deficit to 6% of GDP by 2019, which is unprecedent during a time of full employment.

The dollar pushed 0.2% higher as traders speculated that the deal will add to inflationary pressure, possibly spurring the Fed to raise interest rates more aggressively. The buck closed the week around 1.3% higher for its best weekly performance in nearly 14 months, driven by turmoil in global stock markets. A rising dollar tends to pressure gold and other commodities prices in it for global trade by making them more expensive overseas.

The other precious metals were mixed on the day but lower for the week. Silver lost 1.2% today for a 3.4% weekly decline. Platinum dropped 1.7% on the day and 3.8% on the week. Palladium edged 0.1% higher but still lost 7.8% this week.

At the Comex close: April gold slid $3.30 to $1,315.70; March silver dropped 20 cents to $16.15; April platinum dropped $16.90 to $961.50; and March palladium added $1.30, to $963.35 an ounce.


2/8/2018: Gold gains on safe-haven bids

Source: Bill Musgrave, American Gold Exchange

Austin — Gold gained 0.3% to close at $1,319 as plunging stocks, a weaker dollar, and lingering worries about a possible government shutdown boosted demand for safe havens.

The Dow tumbled 2.2% and the S&P 500 lost 1.9% as traders grew nervous about resurgent inflation and ballooning deficits. Yields on 10-year Treasury notes pushed up to a four-year high this week, signaling higher mid-term inflation expectations.

The Senate passed a budget agreement yesterday to prevent a government shutdown. But the deal has a bumpy road ahead in the House, making already-skittish investors uneasy about taking risks.

In addition, the Senate's deal increases spending by $300 billion over the next two years, putting the federal deficit on track to exceed 5% of GDP by next year. This is by far the most for an economy at full employment since WWII, according to Bloomberg.

The dollar slipped around 0.2% against major rivals as investors shifted into safe-haven currencies like the yen and Swiss franc.

The other precious metals were mixed, with silver rising 0.6% while platinum and palladium dropped 0.3% and 2.3%, respectively.

At the Comex close: April gold gained $4.40 to $1,319; March silver climbed 10 cents to $16.34; April platinum slipped $3.30 to $978.40; and March palladium dropped $22.35 to $962.20 an ounce.

  

Metal Ask      Change
Gold $1,327.88           $2.28
Silver $16.64           $0.06
Platinum $996.29           $2.43
Palladium $1,041.76           $10.94