AGE Daily Gold Update

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

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.

4/4/2024: Gold eases from all-time high

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold eased 0.2% to close under $2,289 after some hawkish Fed jawboning prompted traders to take profits from its 7-session rally to new record highs. The consolidation came despite downticks in the dollar and yields. Silver gained another 0.7% to $27.25 an ounce.

Two prominent Fed officials suggested that the fight against inflation has stalled in recent months, perhaps changing the calculus on when to reduce interest rates. Richmond Fed President Thomas Barkin said today it would “smart for the Fed to take our time.” Minneapolis Fed President Neel Kashkari the Fed might not need to cut interest rates this year if inflation remains sticky.

The comments seemed to push back on Fed Chair Powell’s statement yesterday that recent inflation data is merely a “bump” in the road that will not change the outlook for monetary policy. At its meeting last week, the central bank projected three rate cuts totaling 75 basis points by December.

Chicago Fed President Austan Goolsbee echoed Powell’s view, dismissing fears that the economy is overheating by saying two months of hotter-than-expected data “should not knock us off our path.”

As if on cue, first-time US jobless claims rose to a 9-week high last week, far more than forecast. And yesterday’s ISM report showed growth in the services sector fell to a 3-month low in March. More than two-thirds of Americans are employed in service-related businesses.

The softer data pushed benchmark 10-year Treasury yields down slightly but they remained near 4-month highs. The dollar slipped 0.2% against major rivals.

Fed fund futures traders have lowered their bets on a June rate cut to 56%, down from more than 70% last week. Tomorrow’s release of the government’s nonfarm payrolls report should further clarify the outlook for June.

Platinum and palladium gained 0.7% and 1.9%, respectively.

At the New York spot close: gold dipped $5.60 to $2,288.20; silver rose 19 cents to $27.25; platinum picked up $6.10 to $943.50; and palladium climbed $19.60 to $1,041.30 an ounce.

4/3/2024: Gold rallies 1.5% to another record

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold rallied 1.5% to close at $2.294.40, another all-time high, after mixed US data and relatively dovish comments from Jerome Powell pressured the dollar, boosting alternative stores of value. It was the metal’s seventh straight day of gains. Silver rocketed 4.3% higher to $27.06 an ounce.

The US services sector slowed again in March, with the ISM non-manufacturing PMI dropping to a three-month low. As more than two-thirds of Americans are employed in the services sector, the weakening PMI signals the kind of slowdown the Fed has been seeking.

Perhaps more pleasing to the Fed, the ISM reported that prices paid by businesses for inputs tumbled to a four-year low last month, which suggests lower consumer inflation is in the pipeline.

Meanwhile, private payrolls remain strong. ADP reported businesses added 184,000 new jobs in March, the most since last July. The more definitive US nonfarm payrolls report is due Friday.

Speaking at Stanford, Fed Chair Jerome Powell reiterated that, while the timing is uncertain, the central bank is still on course to reduce interest rates three times this year, as projected by the revised dot-plot this month. Recent gains in jobs and inflation are just “bumps” in the road, Powell said, and do not change the overall picture for monetary policy.

The dollar lost 0.5% against major rivals on the soft ISM data and mildly dovish words from Powell. A weaker dollar lifts gold and other commodities by making them cheaper in other currencies, boosting demand overseas.

Benchmark 10-year Treasury yields were virtually flat.

Platinum and palladium rose 1.6% and 1.7%, respectively.

At the New York spot close: gold gained $33.40 to $2,294.40; silver jumped $1.12 to $27.06; platinum picked up $15.20 to $937.40; and palladium rose $17.40 to $1,021.70 an ounce.

4/2/2024: Gold closes at new all-time high

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold surged 1.1% to a new record close at $2,261 as the escalating conflict in the Middle East combined with rising concerns about sticky inflation to drive investors into the metal as a safe haven and inflation hedge. The gold price has risen nearly 5% over the past six sessions to all-time highs despite headwinds from higher yields and a strong dollar. Silver rocketed 3.4% higher to $25.92 an ounce.

Israeli airstrikes on an embassy compound in Damascus killed two Iranian generals and five military advisors whom Israel claimed were responsible for Syrian attacks on Israeli targets. Iranian Supreme Leader Ayatollah Ali Khamenei has vowed revenge, significantly raising the risk of further escalation in the volatile region.

Meanwhile, strong US economic data continues to signal that inflation may stick around longer than the Fed or the markets would wish. US factory orders rose 1.2% in February after two straight months of declines, the Commerce Department said. The data comes one day after the ISM reported US manufacturing grew in March for the first time since September 2022.

Benchmark 10-year Treasury yields rose to the highest levels since November, trading near 4.4% as traders speculated that the Fed may be less inclined to begin cutting interest rates in June. Fed fund futures now put the odds of a June cut at 58%, down from more than 70% last week.

Ordinarily, high yields weigh on gold by increasing the opportunity cost for holding it. But bullish sentiment for the metal is sweeping past this traditional impediment.

Gold is being bought as protection against rising prices, currency risk, and geopolitical uncertainty. In addition, aggressive central bank purchases and retail physical demand, especially in China, are helping to lift the global gold price.

The dollar slipped 0.2% after reaching a five-month high earlier in the session, supporting gold by making it cheaper overseas.

Platinum jumped 2.4% while palladium was nearly flat.

At the New York spot close: gold gained $24.50 to $2,261; silver surged 85 cents to $25.92; platinum picked up $21.30 to $922.20; and palladium edges up 30 cents to $1,004.40 an ounce.