AGE Daily Gold Update

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

3/1/2019: Gold falls sharply on risk rally

Source: Bill Musgrave, American Gold Exchange

Austin — Gold fell 1.3% to close at a five-week low under $1,300 as optimism about a possible US-China trade deal spurred risk appetite despite soft US data, dulling demand for safe havens. The metal lost 2.5% this week for its biggest weekly decline since late August.

High-level trade representatives from China and the US will meet again later this month, continuing the negotiations that took place a week ago in Washington. Bloomberg reports that a summit meeting between President Trump and Chinese President Xi Jinping to finalize the pact may occur as early as mid-March.

Stocks jumped on the prospect of an end to the tariff wars that have hurt corporate earnings and slowed global growth since last summer. The S&P 500 added 0.7% and the tech-heavy Nasdaq rose 0.8%.

A spate of soft US data capped Wall Street's gains, however. The ISM reported manufacturing growth fell in February to the lowest level since November 2016. Consumer sentiment fell short of expectations, according to the University of Michigan index.

The dollar gained 0.25% against major rivals on rising risk appetite in financial markets as traders left the yen and Swiss franc, traditional safe havens. A rising dollar pressures gold and other commodities by making them more expensive in other currencies.

A sharp drop in oil prices also weighed on gold as concerns about global demand and record-high domestic production knocked WTI crude down 2.5%. Gold often trade in sympathy with oil as a hedge against energy-related inflation.

The other precious meals were mixed. Silver fell 2.4% for a weekly loss of 4.1%. Platinum lost 1.3% today but rose 2.1% this week. Palladium added 0.3% for a weekly rise of 3%.

At the Comex close: April gold lost $16.90 to $1,299.20; May silver dropped 38 cents to $15.26; April platinum slid $11.50 to $863.70; and June palladium rose $4.60 to $1,506.10 an ounce.