AGE Daily Gold Update

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

4/18/2024: Gold gains on Middle East worries

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold gained 0.4% to close above $2,382 on safe-haven inflows driven by rising tensions in the Middle East. The increase in the gold price came despite net-positive US economic data and hawkish Fed statements that lifted yields and the dollar. Silver inched down less than 0.1% to $28.38 an ounce.

The Philly Factory gauge of regional business activity rose in March to the highest level in two years behind sharp increases in both new orders and shipments. It was the third straight positive reading and follows an upbeat manufacturing survey from the New York Fed region earlier this week.

First-time jobless claims were unchanged at 212,000 last week, indicating that the labor market remains robust, and layoffs are minimal.

On the negative side of the ledger, the Conference Boards index of leading economic indicators resumed its fall in March, losing 0.3% after rising for the first time in two years in February. And existing home sales dropped 4.3% in March.

With most US recent data showing remarkable resilience in the US economy, two more prominent Fed officials threw shade on the prospect of imminent rate cuts. John Williams of the New York Fed said he feels "no urgency " to lower interest rates. The Atlanta Fed's Earl Bostic echoed this view, saying he's not in a "mad dash hurry."

Benchmark 10-year Treasury yields jumped back above 4.6% as traders decreased their bets on a September cate cut. Fed fund futures trading now sees a 65% likelihood of a quarter-point reduction in September, down from 71% yesterday.

Tracking higher with yields, the dollar added 0.2% against major rivals.

Rising yields and a stronger dollar usually weigh on gold. Today these headwinds were overcome by flights to safety after Israel said it will retaliate against Iran for its recent, if unsuccessful, missile and drone attack.

The gold price is also being supported by near-record physical buying by central banks, especially China, and reports of some 522 tonnes of gold purchased in Q1 through the Shanghai Gold Exchange, considered a proxy for Chinese domestic demand.

Platinum and palladium picked up 0.1% and 0.7%, respectively.

At the New York spot close: gold gained $10.60 to $2,382.30; silver dipped 2 cents to $28.38; platinum added $1.10, to $946.50; and palladium picked up $7.70 to $1,038.50 an ounce.

4/17/2024: Gold eases on profit-taking

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold eased 0.8% to hold above $2,370 despite downticks in yields and the dollar as traders took profits from its record run. The gold price has risen in 18 winning sessions in the past 21, gaining more than 10% during that span. Silver was nearly flat, adding less than 0.1% to finish at $28.40 an ounce.

The Fed's Beige Book reported steady economic growth in 10 of the 12 Fed's 12 districts, with businesses "cautiously optimistic" about the rest of the year. Little movement was seen in reducing inflation.

The IMF raised its projections for US growth to 2.7% in 2024, up from 2.1% in January and 1.5% last October. But the agency warned that excessive US fiscal debt and deficits could have "spillover effects" on the global economy.

The stronger US economy is changing the calculus for rate cuts from the Fed. Fed fund futures traders now put the odds of an initial cut in September at 71%, with no more than two in 2024.

Benchmark 10-year Treasury yields receded under 4.6% as investors bought bonds to offset weaker US equities. Yields have jumped to the highest levels since early November following comments yesterday by Fed Chair Powell signaling that interest rates are unlikely to fall soon.

Tracking lower with yields, the dollar dipped 0.3% against major rivals, cushioning gold's slide by making it cheaper overseas.

Gold remains supported by global safe-haven inflows because of the Ukraine and Gaza wars, as well as aggressive central bank purchasing, especially by China, India, and Turkey. Citigroup now projects a target gold price of $2,875 in 2025.

Platinum fell 2.2% while palladium was nearly flat.

At the New York spot close: gold eased $19.10 to $2,371.30; silver inched down 2 cents to $28.40; platinum shed $21 to $945.40; and palladium dipped 40 cents to $1,030.80 an ounce.

4/16/2024: Gold gains despite yields, dollar

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold gained 1.1% to close at $2,390.80, another record-high finish, despite rising yields and a stronger dollar as momentum buying and safe-haven inflows continue to trump fading rate-cut expectations. Silver fell 1.2% to $28.38 an ounce.

Fed Chair Jerome Powell said today that interest rates are likely to remain elevated because the economy and inflation are both hotter than expected. Recent data "have not given us greater confidence" that inflation is coming down, Powell told a DC think tank.

Separately, Fed Vice Chair Philip Jefferson reinforced Powell's higher-for-longer refrain, saying sharp increases in consumer prices and ongoing strength in the labor market signal an uncertain outlook for inflation in coming months.

Benchmark 10-year Treasury yields climbed to the highest level since early November as investors digested the dimming rate view. Fed fund futures traders now project only two rate cuts this year, down from three just weeks ago, with the first not coming until September at the earliest.

Tracking higher with yields, the dollar rose 0.1% against a basket of major rivals, notching a five-month high against the euro and hitting the highest level against the yen since 1990.

Ordinarily, increases in yields and the dollar weigh on gold, but bullish sentiment is carrying the metal to a succession of record highs despite these traditional headwinds. Gold is a global market. Demand is being driven by the worldwide appetite for hedges against currency risk and geopolitical uncertainty.

Platinum and palladium lost 0.6% and 1.2%, respectively.

At the New York spot close: gold gained $25 to $2,390.80; silver shed 34 cents to $28.38; platinum dipped $5.60 to $966.40; and palladium slid $12.70 to $1,031.20 an ounce.

4/15/2024: Gold gains on safe-haven demand

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold gained 0.4% to close at $2,365.80, yet another new record, on safe-haven inflows because of escalating Middle East turmoil. The gold price has now risen in 16 of the past 18 sessions, posting a new all-time high almost every day. Silver added 1.4% to close at $28.71 an ounce.

Iran fired more than 200 exploding drones and missiles at Israel over the weekend in retaliation for its recent strike on Iran's embassy in Damascus, which killed a high-ranking general. While mostly intercepted without damage, the barrage was the first direct attack on Israel by another country in more than 30 years, significantly escalating the threat of a wider war in the region.

Against this concerning backdrop, upbeat US economic data limited gold's rise by lifting the dollar and Treasury yields.

Retail sales jumped 0.7% in March, more than doubling forecasts, and totals for February were revised higher to 0.9% instead of 0.6%. Retail sales comprise around one-third of consumer spending, which in turn accounts for two-thirds of GDP.

The Empire State manufacturing survey advanced from negative 20.9 in March to negative 14.3 in April, fueling optimism that the New York Fed region may be pulling out of its five-month contraction.

Benchmark 10-year Treasury yields rose to a five-month high above 4.6% as traders speculated that the strong retail sales data could further delay prospects for rate cuts from the Fed. Higher yields weigh on gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Tracking higher with yields, the dollar rose 0.2%, adding headwind from gold and other commodities by making them pricier in other currencies.

Meanwhile, the VIX volatility index, known as Wall Street's "fear gauge," surged to a six-year high as investors hedged against the possibility of a stock market crash.

Platinum and palladium dropped 2.1% and 1.5%, respectively.

At the New York spot close: gold gained $9.60 to $2,365.80; silver rose 39 cents to $28.71; platinum shed $21.20 to $972; and palladium retreated by $15.60 to $1,043.90 an ounce.

4/12/2024: Gold scores 1.3% weekly win

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold added less than 0.1% to close at $2,356.20, another all-time high, as worries about escalating Middle East violence and China's economic woes stoked safe-haven inflows and higher oil prices. Adding 1.3% for the week, the gold price has now risen in 15 of the last 17 sessions. Silver added 0.3% to close at $28.33 an ounce, posting a weekly rise of 3%.

Following last week's killing by of a senior Iranian officer in an Israeli attack on an embassy compound in Syria, Israel is bracing retaliation that is expected "very soon, in the next few days," according to Israel's largest daily newspaper. Iran's supreme leader, calling it an attack on Iran itself, has vowed that Israel "must be punished and shall be."

The growing risk of a major expansion in the Gaza war to include Iran is driving global into safe havens. Benchmark sovereign bonds in the US and other major economies rallied today, depressing yields, while the dollar gathered flights to safety in the currency markets.

Oil surged 1.2% to more than $86 per barrel on worries that escalating violence in the Middle East will reduce global supplies. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

Softer growth in China, the world's second largest economy, is also prompting global demand for gold. Recent data show China's imports and exports have both fallen off Q2 after a relatively solid Q1, according to recent PMI surveys and the China' Beige Book. This week, Fitch Ratings downgraded China's foreign debt rating to negative from stable.

And gold's historic rally remains supported by near-record levels of buying by global central banks, especially China's, to diversify away from G7 currency risk.

The metal reached an intra-day record of $2,432.70 before falling back late in the session.

Platinum rose 1.5% for a weekly advance of 6.8%; palladium picked up 1.8% for the day and 5.2% for the week.

At the New York spot close: gold added $1.4, to $2,356.20; silver rose 8 cents to $28.33; platinum picked up $14.70 to $993.20; and palladium climbed $18.80 to $1,059.50 an ounce.

4/11/2024: Gold jumps on soft wholesale prices

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold jumped 1.1% to close at a new all-time high of $2,354.80 after soft PPI data reduced inflation worries and rekindled expectations that the Fed may be back on track for rate cuts in Q3. The gold price has now risen in 14 over the last 16 sessions, adding nearly 11%. Silver gained 0.7% to close at $28.25 an ounce.

The producer price index rose a modest 0.2% in March, less than forecast, although the 12-month rate rose to 2.1% from an extremely low 1.6% in February. Wholesale prices typically anticipate consumer prices, helping to reduce worries about resurgent inflation after yesterday's hotter-than-expected CPI.

While a June rate cut continues to be unlikely, Fed fund futures traders increased their bets on a quarter-point rate cut in July to 50/50. The Fed's meeting in September is now considered most likely, with the probability increasing to 71% from under 65% yesterday.

Benchmark 10-year Treasury yields and the dollar both edged down slightly after the PPI print.

Gold's historic rally remains supported by near-record levels of buying by global central banks to diversify away from G7 currency risk. Safe-haven demand because of geopolitical turmoil in Ukraine and the Middle East are also fueling rebounds whenever the price weakens slightly.

Platinum rose 1% while palladium fell 1.7%.

At the New York spot close: gold gained $25.20 to $2,354.80; silver rose 20 cents to $28.25; platinum picked up $10 to $978.50; and palladium dropped $17.70 to $1,040.70 an ounce.

4/10/2024: Gold slips on elevated CPI

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold slipped 0.6% to close under $2,330 after stronger-than-expected consumer inflation altered the outlook for rate cuts, boosting the dollar and Treasury yields. It was only the metal's second down session in the past 15. Silver edged up 0.3% to $28.05 an ounce.

The consumer price index rose 0.4% in March, slightly more than forecasts of 0.3%, to post a 12-month increase of 3.5%, the highest level since last September. The core rate, less food and energy costs, also added 0.4%, leaving the annualized increase unchanged at 3.8%.

Combined with last week's nonfarm payrolls report showing accelerated job growth in March, the hot CPI print indicates that the economy is not cooling as quickly as the Fed anticipated.

Fed fund futures traders now see a June rate as unlikely, with a probability of just 23%, down from around 56% yesterday.

Benchmark 10-year Treasury yields surged above 4.55% on the shifting rate view, pressuring gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Tracking higher with yields, the dollar rallied 1.1% against major rivals, hitting the highest level against the yen since the mid-1990s. A stronger dollar pressures gold and other commodities by making them pricier in other currencies.

Gold remains supported by safe-haven inflows because of geopolitical turmoil and economic uncertainty in other major economies. Fitch Ratings downgraded China's foreign debt rating to negative from stable, citing growth concerns and expanding deficits.

Platinum and palladium fell 0.8% and 2.3%, respectively.

At the New York spot close: gold slipped $13.90 to $2,329.60; silver added 7 cents, to $28.05; platinum slid $7.90 to $968.50; and palladium lost $27.70 to $1,058.40 an ounce.

4/9/2024: Gold rises to another new record

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold gained 0.5% to close at $2,343.50, another new record high, on safe-haven and momentum buying as yields slipped ahead of tomorrow's CPI release. The gold price has now risen in 13 of the past 14 sessions. Silver rose 0.6% to close at $27.98 an ounce.

Recent US economic data has been ambiguous. Inflation was stickier than expected in February while March payroll gains were unexpectedly robust. But the crucial US services sector, which employs nearly three out of every four Americans, weakened dramatically last month, suggesting a broader showdown may be coming.

Today, the National Federation of Independent Business (NFIB) reported that small-business sentiment fell in March to the lowest level in 11 years.

Fed fund futures traders have upped their bets for a June rate cut to a 56% likelihood from 49% yesterday. Tomorrow's release of the minutes from the Fed's March meeting should help to clarify the central bankers' thinking about when to reduce rates.

Just as import for the rate view will be tomorrow's release of the consumer price index data for March. Economists anticipate a rise of 0.3% for the month, down from 0.4% in February.

Benchmark 10-year Treasury yields slipped back under 4.4% as traders reassessed the Fed's rate-cut timeline. Falling yields boost gold by decreasing the opportunity cost for holding it instead of bonds for safety.

The dollar was virtually flat. Platinum and palladium picked up 1.2% and 3.4%, respectively.

At the New York spot close: gold gained $11.80 to $2,343.50; silver rose 18 cents to $27.98; platinum climbed $11.50 to $976.40; and palladium advanced $35.60 to $1,086.10 an ounce.

4/8/2024: Gold gains on dollar, bank buys

Source: Bill Musgrave, American Gold Exchange

Austin — Extending last week’s 5% rally, New York spot gold added another 0.2% to close above $2,331 despite higher yields as the dollar slipped ahead of this week’s CPI print, boosting alternative stores of value. Strong central bank buying also propelled the gold price. Silver surged 1.1% to close at $27.81 an ounce.

The People’s Bank of China reported purchasing 5 tonnes of gold in March, adding to its aggressive campaign to diversify its holdings away from G7 currencies. In February, China bought 22 tonnes, according to the World Gold Council. Kazakhstan, Turkey, and several easter European countries also bought gold in March.

Global central banks have purchased record amounts of gold over the past two years, lending strong support to the global gold price. Like individual investors, central banks buy gold as a hedge against rising geopolitical turmoil and currency risks.

Benchmark 10-year Treasury yields crept above 4.42% as traders speculate that the Fed may delay rate cuts until the summer and cut fewer times this year. Higher yields are a headwind for gold because they increase the opportunity cost for holding it instead of bonds for safety.

Fed fun futures traders now see the odds of a June cut at slightly less than 50/50, down from around 60/40 in favor a week ago. And rather than 75 basis points in cuts this year, they now expect 60.

But the dollar slipped 0.2% despite higher yields as investors look toward this week’s release of the March consumer price index for direction on monetary policy. A weaker dollar lifts gold and other commodities by making them cheaper in other currencies.

Platinum and palladium jumped 3.7% and 4.3%, respectively.

At the New York spot close: gold gained $6 to $2,331.70; silver added 30 cents, to $27.81; platinum picked up $34.60 to $964.70; and palladium rose $43.10 to $1,050.50 an ounce.

4/5/2024: Gold rockets to another record

Source: Bill Musgrave, American Gold Exchange

Austin — The monumental rally in gold continued today, with the New York spot price rocketing 1.6% higher to close at $2,325.70, another new record high. The impressive rise came despite a robust jobs report that lifted yields, the dollar, and Wall Street. Silver added 1%, to $27.50 an ounce.

Hitting a series of new all-time highs, gold rose nearly 5% this week to post a 13% gain for the year. Silver picked up a whopping 11% this week to push its 2024 advance to 14%.

The BLS reported US nonfarm payrolls added 303,000 new jobs in March, far more than the 200,000 forecast, while totals for January and February were revised higher by a combined 22,000. The unemployment rate dipped to 3.8% from 3.9% the month before.

Meanwhile, hourly wages increased by a modest 0.3% to lower annualized wage growth to 4.1% from 4.3% in February. Lowering wage pressure has been an important goal for the Fed in its fight against inflation.

The shockingly strong jobs report prompted two more Fed officials to question the imminent need for rate cuts. Fed Governor Michelle Bowman said “we are still not yet at the point” where the central bank can justify lowering interest rates. Dallas Fed President Lorie Logan said it is “much too early to think about cutting rates.”

Fed fund futures trading puts the odds of a June cut at 55%, down only slightly from yesterday, with three cuts likely this year. Apparently, the markets still believe Jerome Powell, who said earlier this week that three rate cuts are on the table for 2024.

Benchmark 10-year Treasury yields edged up after the jobs data but remained under 4.4%. Tracking higher with yields, the dollar added a modest 0.2% against major rivals. All three major US stock indexes added around 1%.

Typically, increases in yields and the dollar weigh on gold, but bullish sentiment is carrying the metal despite these traditional headwinds. Gold is a global market. Demand is being driven by the worldwide appetite for havens against currency risk and geopolitical uncertainty.

In addition, aggressive central bank purchases and retail physical demand, especially in China, are lifting the global gold price. The World Gold Council reported that the People’s Bank of China bought 22 tonnes of gold in February alone.

Platinum fell 1.4% today but still gained 2.5% this week. Palladium dropped 3.3% for a weekly decline of 1.4%.

At the New York spot close: gold surged $36.90 to $2,325.70; silver climbed 26 cents to $27.50; platinum slipped $13.20 to $930.30; and palladium shed $33.90 to 1,007.40 an ounce.