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


3/27/2024: Gold rises again on yield erosion

Source: Bill Musgrave, American Gold Exchange

Austin — Spot gold rose 0.6% to close at $2,190.60 as Treasury yields eroded further ahead of this Friday’s release of inflation data that may influence the course of interest rate policy from the Fed. The gold price has risen in five of the past six sessions. Silver added 0.5% to close at $24.62 an ounce.

With no major economic data to influence the markets today, benchmark 10-year Treasury yields slipped under 4.2% on speculation that the upcoming PCE release will not be hot enough to change the Fed’s projection of three rate cuts this year. Falling yields lift gold by decreasing the opportunity cost for holding it instead of bonds for safety.

The Fed’s preferred inflation gauge, the personal consumption expenditures index rose at 0.3% in January. Analysts expect the headline number to inch up to 4% in February, while the more important core number, less food and energy, inches down to 0.3% from 0.4% the month before.

The dollar was flat.

Gold remains supported by elevated demand from central banks, especially China’s, which use the metal to diversify risk from G7 currencies. Robust physical demand from Chinese households is also undergirding the gold price. China is the world’s biggest gold consumer.

Platinum and palladium fell 1.5% and 1.2%, respectively.

At the New York spot close: gold rose $13.40 to $2,190.60; silver added 13 cents, to $24.62; platinum lost $13.40 to $899.90; and palladium shed $12.10 to $991 an ounce.


3/26/2024: Gold edges up, yields edge down

Source: Bill Musgrave, American Gold Exchange

Austin — Spot gold edged up less than 0.1% to close at $2,177.20 on mixed US economic data and slightly lower Treasury yields as the markets await Friday’s PCE inflation report, which could supply new clues about the timing of rate cuts from the Fed. Silver dropped 1% to $24.48 an ounce.

Consumer confidence fell to a four-month low in March, the Conference Board said, as Americans worry about sticky inflation and the 2024 presidential election. Consumer spending makes up around 70% of GDP.

On the plus side, durable goods orders rose 1.4% in February, more than forecast, and business investment picked up, perhaps signaling a rebound in the beleaguered manufacturing sector. Yet shipments of manufactured goods dropped, which may weigh on GDP.

Benchmark 10-year Treasury yields dipped as the downbeat data helped to consolidate speculation that the Fed is likely to launch rate cuts in June. Falling yields support gold by decreasing the opportunity cost for holding it instead of bonds for safety.

Fed fund futures trading currently puts the odds of a quarter-point cut in June at 71%. But this Friday’s release of the personal consumption expenditures index, the Fed’s preferred inflation gauge, could influence the rate view in either direction.

The dollar edged up less than 0.1%, capping gold’s rise, as the yen slipped after Japan’s finance minister talked down the currency’s recent rally.

Platinum added less than 0.1% while palladium dropped 1%.

At the New York spot close: gold inched up 80 cents to $2,177.20; silver shed 26 cents to $24.48; platinum picked up 50 cents to $909.30; and palladium lost $10.20 to $1,003.10 an ounce.


3/25/2024: Gold gains on dollar, oil

Source: Bill Musgrave, American Gold Exchange

Austin — Gold gained 0.8% to close at $2,176.40 as the dollar retreated and the oil price jumped, fueling demand for inflation hedges and alternative stores of value. Silver picked up 0.2% to close at $24.76 an ounce.

The US dollar shed 0.2% against major rivals, retracing some of last week’s rally, as the yen rebounded of reports that the Bank of Japan will step in to prop-up the weakening currency. A rallying yuan also weighed on the buck following reports than China has ordered state banks to buy yuan and sell dollars in the open market.

A falling dollar supports gold and other commodities priced in it for global trade by making them less expensive in other currencies, stimulating demand overseas.

Oil jumped 1.7% to $82 per barrel on concerns that escalating turmoil in the Russia-Ukraine and Hamas-Israel wars will further disrupt global supplies. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

Gold continues to be supported by last week’s Fed meeting, which signaled three rate cuts are still on the table for 2024. Chicago Fed President Austan Goolsbee reinforced that stance view today, though would not commit to a start date.

Fed fund futures trading puts the odds of the initial quarter-point cut in June at 71%, up from 55% a week ago. This Friday’s release of the Commerce Departments PCE index, the Fed’s preferred inflation gauge, should provide more clarity on the rate view.

Platinum and palladium rose 1.2% and 1.5%, respectively.

At the New York spot close: gold gained $16.40 to $2,176.40; silver added a nickel, to $24.76; platinum picked up $10.40 to $908.80; and palladium advanced $15 to $1,013.30 an ounce.


3/22/2024: Gold falls on sharp dollar rally

Source: Bill Musgrave, American Gold Exchange

Austin — Gold fell 1.1% to close at $2,160 as a stronger dollar and weaker demand in India undercut prices despite a further erosion in Treasury yields. For the week, the gold price was little changed, inching down less than 0.1%. Silver slid 0.6% to 25.69, losing 2% for the week.

The dollar jumped 1% against major rivals to post its second straight weekly gain as currency traders position themselves for slower rate cuts from the Fed than other major central banks. A rising buck pressures gold by making it pricier in other currencies.

The Swiss National Bank surprised the markets this week with a quarter-point reduction, making it the first major central bank to cut. The ECB has publicly stated it will cut in June; the Bank of England signaled this week this week that rate cuts are coming.

Emerging markets have already begun lowering rates, and China has begun large-scale easing to pull its economy out of its Covid tailspin, to the extreme detriment of the yuan. Only the Bank of Japan is bucking the trend, raising rates slightly this week to lift itself out negative interest rates for the first time in 17 years.

Against this backdrop, the US economy is faring better than most of its peers and US inflation proving stickier than expected. The dollar gathered bids this week as traders bet that the Fed will lag in what’s being called “the great central bank reversal” from tightening to loosening.

While a rising dollar is a headwind for gold, sticky US inflation is driving buyers to its traditional roll as an inflation hedge and ongoing geopolitical turmoil is stoking global demand for safe havens.

Benchmark 10-year Treasury yields fell to just above 4.2%, its 200-day moving average on carryover from the Fed’s dovish post-meeting announcement that it still plans to cut rates three times this year. Sovereign bond yields tend to mirror each other, and the dovish regimes overseas may further weigh on US yields.

Adding to pressure from the stronger dollar, physical demand for gold in India flagged this week because of high prices from the metal’s recent rally to all-time high prices. India is the world’s second biggest gold buyer.

Platinum fell 1.6% for a weekly loss of 4.8% while palladium shed 2% for a weekly retreat of 8.4%.

At the New York spot close: gold dropped $24.70 to $2,160; silver slipped 16 cents to $24.69; platinum slid $14.60 to $898.40; and palladium shed $20.60 to $998.30 an ounce.


3/21/2024: Gold rallies on rate view relief

Source: Bill Musgrave, American Gold Exchange

Austin — Gold rallied 1.1% to close near $2,185 despite upbeat US economic data on follow-through from yesterday’s Fed forecast of three rate cuts in 2024 and dovish post-meeting comments from Fed Chair Jerome Powell. Silver slipped 0.3% to $24.85 an ounce.

Following its two-day meeting on monetary policy yesterday, the Fed updated its quarterly dot-plot forecast to show it still intends to cut interest rates three times this year, just as it did last December. The cuts would drop the median benchmark rate to 4.6% from its current 5.25% to 5.5%.

The markets were surprised and relieved that the Fed stuck to its rate-cutting plan despite recent evidence of stickier core inflation, strength in the labor market, and stronger-than-expected GDP growth.

In his post-meeting press conference, Jerome Powell dismissed concerns that low unemployment may stoke inflation and change the outlook for interest rates. “Strong job growth is not a reason for us to be concerned about inflation,” Powell asserted, and would not be “a reason to hold-off interest rate reductions.”

Fed fund futures now put the odds of a quarter-point cut in June at 73%, up from around 50% earlier in the week.

Benchmark 10-year Treasury yields fell after Powell’s comments and extended that slide today, dropping to 4.27%. Lower yields boost gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Gold’s gains came despite a stronger dollar, which added 0.5% against major rivals after the Swiss National Bank unexpectedly cut interest rates, becoming the first major central bank to do so. The Bank of England held rates unchanged but signaled that falling inflation may open the door for lower rates in the UK.

Some upbeat US data also helped the buck. The Philly Fed factory gauge stayed slightly in expansion for a second month. The Conference Board's index of leading indicators rose 0.1% in February for its first increase in two years. The S&P services and manufacturing PMIs were both positive, if only barely. And home sales rose by the most in a year.

Platinum and palladium rose 1.5% and 1.9%, respectively.

At the New York spot close: gold gained $23.70 to $2,184.70; silver dipped 8 cents to $24.85; platinum rose $13.60 to $913; and palladium picked up $18.70 to $1,018.90 an ounce.


3/20/2024: Gold extends rise after Fed

Source: Bill Musgrave, American Gold Exchange

Austin — Gold inched up $1.30, or less than 0.1%, to close at $2,161 before the Fed’s decision on interest rates. The metal then jumped around $10 an ounce in electronic futures trading after the central bank retained its projection of three rate cuts for 2024. Silver edged down less than 0.1% to $24.93 an ounce.

As expected, the Federal Reserve left interest rates unchanged at its two-day meeting on monetary policy that ended today.

Not so expected was the quarterly update to its dot-plot forecast of coming rates. As in December, the Fed still projects three rate cuts of 25 basis points coming in 2024, dropping the median benchmark rate to 4.6% from its current 5.25% to 5.5%.

Many market participants were surprised that the Fed did not reduce its forecast for this year, given recent data and the policy statement’s acknowledgement of stickier core inflation, a still-robust labor market, and stronger-than-expected GDP growth.

Benchmark 10-year Treasury yields dropped after the decision, boosting gold by decreasing the opportunity cost for holding it instead of bonds for safety. The dollar retraced its earlier gains.

Separately, the CBO is projecting US public debt to reach its highest level ever in 2029, at 107% of the total US economy. By 2054, this debt will swell to 166% of the economy.

Platinum slipped 0.2% while palladium added less than 0.1%.

At the New York spot close: gold added $1.30, to $2,161; silver dipped 3 cents to $24.93; platinum slipped $1.70 to $899.40; and palladium picked up 80 cents to $1,000.20 an ounce.


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.


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.


3/15/2024: Gold has first down week four

Source: Bill Musgrave, American Gold Exchange

Austin — Gold dipped 0.3% to close at $2,161.50 as a shifting outlook for rate cuts from the Fed lifted the dollar and yields, undercutting alternative stores of value. The gold price fell 0.8% this week to notch its first weekly loss in more than a month. Silver gained 1.3% to $25.20 today, on its way to a whopping 8% rally this week.

Import prices rose 0.3% in February after rising 0.8% the month before, adding to the upturn in US inflation. While prices on imported goods are still 0.8% lower than a year ago, the deflationary trend has notably reversed in recent months.

Coming after elevated CPI and PPI this week, the rising import-price data underlines the inconvenient truth that inflation is stickier than the Fed would like to see before cutting interest rates.

Against this background, March manufacturing activity tumbled deeply into contraction in the New York Fed region, falling to negative 20.9, where readings under zero signify deterioration. Often seen as a bellwether for national manufacturing, the Empire State index has been negative in five of the past six months.

Still, sticky inflation is causing Fed fund futures traders to shift their rate-cut expectations. The likelihood of a quarter-point reduction in June has fallen to 55%, down from more than 73% one week ago.

Benchmark 10-year Treasury yields edged up above 4.3%, the highest nearly a month. Higher yields pressure gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Tracking with yields, the dollar added 0.1% against major rivals to post a weekly gain of 0.7%, its biggest since mid-January. A rising dollar weighs on gold by making it pricier overseas.

Platinum rose 0.8% today and 3.1% this week. Palladium added 1.1% for a weekly rise of 6.3%.

At the New York spot close: gold dipped $6 to $2,161.50; silver rose 33 cents to $25.20; platinum picked up $7.80 to $943.50; and palladium advanced $11.70 to $1,090.30 an ounce.


3/14/2024: Gold slides on strong PPI

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slid 0.6% to close at $2,167.50 after a strong PPI clouded the prospect for rate cuts from the Fed, boosting yields and the dollar while pressuring alternative assets. It was the second retreat in three sessions for the gold price following eight straight days of gains. Silver dipped 0.4% to $24.87 an ounce.

The producer price index rose 0.8% in February, beating forecasts, to lift the annual wholesale inflation rate to 1.6% from 1% in January. The core PPI, less food and energy, rose a more modest 0.4%.

Following an elevated CPI earlier in the week, the new PPI data show inflation trending in the wrong direction, something the Fed may note when it meets next week on monetary policy, perhaps revising its dot-plot forecast of rate cuts for this year.

Fed fund futures traders have decreased their bets on a quarter-point cut in June to 60%, from around 70% before this week’s inflation reports.

Mixed data added to the rate uncertainty. First-time jobless claims fell 1,000 to 209,000 last week, signaling ongoing strength in the labor market. But retail sales rebounded less than expected in February, and were revised lower in December and January, suggesting a slowdown in consumer spending, the primary driver of GDP.

Benchmark 10-year Treasury yields rose to a one-week high above 4.2% after the PPI release, weighing on gold by increasing the opportunity cost for holding it instead of bonds for safety.

Tracking higher with yields, the dollar rose 0.5% against major rivals. A stronger dollar is a headwind for gold and other commodities because it makes them more expensive in other currencies, limiting demand overseas.

Platinum dropped 1% while palladium rose 0.7%.

At the New York spot close: gold slid $13.30 to $2,167.50; silver dropped 9 cents to $24.87; platinum shed $9.20 to $935.70; and p0alladium picked up $7.60 to $1,078.60 an ounce.

  

Metal Ask      Change
Gold $2,225.05           Price Change Up Arrow $24.26
Silver $25.02           Price Change Up Arrow $0.20
Platinum $919.79           Price Change Up Arrow $9.43
Palladium $1,052.70           Price Change Up Arrow $24.11
In US Dollars