AGE Daily Gold Update

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

1/3/2019: Gold jumps on haven demand

Source: Bill Musgrave, American Gold Exchange

Austin — Gold jumped 0.8% to close just under $1,295 after weak US factory data and a downgraded forecast from Apple caused equities to tumble, spurring demand for safe havens.

The ISM reported factory activity fell in December to the lowest level in more than two years. The index dropped 5.2 points, the biggest decline since October 2008, when the economy was falling into the Great Recession. All components were weaker. Purchase managers pointed to trade conflicts with China, tariffs, a strong dollar, and slower global growth as main drivers.

Economic weakness in China caused Apple to slash its quarterly revenue forecast for the first time in 15 years as iPhone sales suffered in Asia. White House chief economist Kevin Hassett said other major US corporations are also likely to see decreased earnings until a trade deal with China is reached.

US equities plunged on the factory data and Apple announcement, with the Dow losing 2.8% and the tech-heavy Nasdaq 3%. The markets largely ignored ADP data showing US private employers added 271,000 jobs in December, the most in nearly two years.

The dollar lost 0.4% against major rivals as investors shifted heavily into the perceived safety of the Japanese yen. A falling dollar supports gold and other commodities priced in it for global trade by making them less expensive overseas.

Also supporting gold and pressuring the dollar, Dallas Fed President Robert Kaplan said the central bank should paused rate hikes until it obtains a better sense of the health of the economy. Steady rate increases over the past two years have boosted the dollar and undermined the gold price.

The other precious metals were mostly higher, with silver and palladium rising 1% and 0.2% while platinum slipped 0.6%.

At the Comex close: February gold gained $10.70 to $1,294.80; March silver climbed 15 cents to $15.80; April platinum slipped $4.70 to $799.30; and March palladium picked up $1.50 to $1,200.30 an ounce.