AGE Daily Gold Update

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

1/10/2022: Gold rises on haven demand

Source: Bill Musgrave, American Gold Exchange

Austin — Gold rose 0.1% to close near $1,799 on safe-haven demand as Wall Street pulled back on expectations that the Fed will raise interest rates aggressively to fight inflation.

Friday’s dismal nonfarm payrolls report, which showed only 199,000 new jobs created in December, prompted several major investment houses to raise their estimates for rate hikes in 2022. Goldman Sachs, Deutsche Bank, and JP Morgan Chase now project four quarter-point hikes in 2022, up from the three previously forecast.

With the unemployment rate falling to 3.9% despite the weak increase in jobs added, the bankers now speculate that the economy is bordering on full employment, liberating the Fed to tighten monetary policy more rapidly. Achieving full employment has been a primary Fed target throughout the pandemic.

All three major indexes fell sharply in early trading before recouping some of those losses on bargain-hunting and a rally in tech shares. The Dow and S&P 500 still lost 0.5% and 0.2%, respectively, while the tech-heavy Nasdaq ended little changed.

Benchmark 10-year Treasury yields pushed above 1.8% before surrendering those gains on the partial rebound in equities. The dollar rose 0.2% against major rivals on the prospect of higher interest rates.

Gold’s gains came despite higher Treasury yields and a rising dollar, both of which typically weigh on the metal. Higher yields increase the opportunity cost for holding it instead of bonds; a rising dollar makes it more expensive in other currencies.

The other precious metals were mixed, with silver adding 0.2% while platinum and palladium dropped 2.4% and 0.7%, respectively.

At the Comex close: February gold gained $1.40 to $1,798.80; March silver added a nickel, to $22.46; April platinum lost $22.90 to $933.60; and March palladium slid $12.90 to $1,909.20 an ounce.