AGE Daily Gold Update

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

3/13/2019: Gold jumps on Brexit, PPI

Source: Bill Musgrave, American Gold Exchange

Austin — Gold gained for a second session, jumping 0.8% to close at a two-week high above $1,308, as Brexit uncertainty and soft wholesale inflation pressured the dollar, boosting demand for safe-haven assets.

British Prime Minister Theresa May's Brexit plan was rejected by Parliament late yesterday, setting up a vote today on whether Britain will crash out of the EU later this month with no trade agreement in place. The so-called "hard Brexit," considered the worst-case scenario, would be chaotic and damaging to the economies of both the UK and EU.

The British pound jumped on expectations that Parliament will postpone Brexit altogether rather than risk the fallout of a hard Brexit, pushing ICE Dollar Index down 0.3%. A weaker dollar supports gold and other commodities priced in it for global trade by making them less expensive overseas.

Also pressuring the dollar, US wholesale inflation was tame in February, with the Producer Price Index rising just 0.1%. The 12-month increase fell to 1.9%, far lower than last summer's 3.4%. The recent downtrend in prices decreases the likelihood that the Fed will raise interest rates this year.

US stocks also rose on the soft PPI, with the S&P 500 and Nasdaq both jumping around 0.8% as lower interest rates are expected to boost corporate profits by decreasing borrowing costs.

The other precious metals also rose, with silver adding 0.5% while platinum and palladium climbed 1.7% and 0.8%, respectively.

At the Comex close: April gold gained $10.40 to $1,308.50; May silver rose 7 cents to $15.49; April added $9.80, to $845.90; and June palladium climbed $16.70 to $1,502.10 an ounce.