AGE Daily Gold Update

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

1/11/2022: Gold surges on Powell testimony

Source: Bill Musgrave, American Gold Exchange

Austin — Gold surged 1.1% to close above $1,818 on falling yields and a weaker dollar after congressional testimony from Jerome Powell reassured the markets that monetary policy will not be too aggressive. It was the metal’s third straight winning session.

Speaking to the Senate Banking Committee, the Fed Chair vowed a “soft landing” for the economy as the central bank begins to normalize monetary policy this year. While acknowledging the need for higher interest rates rise to combat inflation, Powell also signaled a gentle approach to reducing the Fed’s balance sheet rather than the abrupt sell-off of assets many investors feared.

Wall Street cheered Powell’s messaging as less hawkish than expected. The Dow rose 0.5% while the S&P 500 jumped 1%, led by rate-sensitive technology shares. The tech-heavy Nasdaq leapt 1.4%.

Benchmark 10-year Treasury yields pulled back to 1.74%, boosting gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Further fueling gold’s rise, the dollar lost 0.4% against major rivals as risk-related currencies came to the fore. A falling dollar supports gold and other commodities by making them less expensive overseas.

The other precious metals were also higher, with silver jumping 1.6% while platinum and palladium licked up 4.2% and 0.7%, respectively.

At the Comex close: February gold surged $19.70 to $1,818.50; March silver rose 35 cents to $22.81; April platinum climbed $39.60 to $973.20; and March palladium added $12.90, to $1,922.10 an ounce.