AGE Daily Gold Update

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

1/15/2019: Gold dips on risk rally

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slipped 0.2% to close under $1,289 as dovish Fed comments and promises of stimulus in China fueled a rally in risk assets, cutting demand for safe havens.

China announced it will take strong measures to boost its flagging economy. The People's Bank of China plans to add stimulus through additional lending to small businesses. And the Ministry of Finance has pledged to cut taxes and increase infrastructure spending,

Wall Street bounced higher, with the S&P 500 adding 1% and the tech-heavy Nasdaq jumping 1.7%, as news of the stimulus measures stoked risk appetite despite soft earnings reports from the US financial sector.

Also supporting equities, Fed officials from both ends of the spectrum converged today in asserting that the central bank should stop raising interest rates. George of the Kansas City Fed, typically among the most hawkish of Fed members, said slowing global growth and weakening inflation are good reasons to pause rate hikes.

Separately, Neal Kashkari of the Minneapolis Fed said wage, job, and inflation data all point to stopping rate hikes. Kashkari is considered one of the most dovish Fed members. Futures markets predict only one rate hike in 2019, down from four in 2018.

US data released today underscored the point. Wholesale inflation as measured by the PPI fell 0.2% in December on cheaper gasoline. And the Empire State manufacturing index slid to its lowest reading in more than a year.

The dollar rose 0.4% against major rivals on rising risk appetite, weighing on gold and other commodities by making them more expensive overseas.

The other precious metals were also lower, with silver dropping 0.4% while platinum and palladium lost 0.3% and 0.4%, respectively.

At the Comex close: February gold dipped $2.90 to $1,288.40; March silver dropped 7 cents to $15.62; April platinum slid $2.40 to $800.10; and March palladium fell $4.90 to $1,277.10 an ounce.