AGE Daily Gold Update

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

3/14/2023: Gold slips after stubborn CPI

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slipped 0.3% to close under $1,911 as traders took profits from yesterday's 2.6% rally and consumer prices rose more slowly, but perhaps not enough to stop the Fed from raising interest rates this month.

The consumer price index rose 0.4% in February, down from 0.5% the month before, and the annual rate declined from 6.4% to 6%, the lowest since September 2021. The rising cost of renting and homeownership accounted for 70% of the increase. The core rate, minus volatile food and energy costs, dipped from 5.6% to 5.5%.

While encouraging, the lower CPI was widely seen by analysts as inadequate to keep the Fed from raising interest rates next week despite the instability in the banking sector. Fed fund futures traders project a 77% chance of a quarter-point hike, with no chance of a half-point.

Prior to the dramatic failures of Silicon Valley Bank and Signature Bank last week, the odds of a half-point rate hike were more than 70%.

Yields on 2-year Treasurys jumped 35 basis points on the stubborn CPI print, the biggest one-day rise since 2009. Benchmark 10-year Treasury yields edged back above 3.6%, weighing on gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Yields had fallen dramatically over the previous three sessions, lifting gold to a five-week high above $1,916 on flights to safety from potential contagion in the financial markets. Government reassurances about the stability of the banking sector have eased anxieties somewhat.

The other precious metals were mixed, with silver and palladium adding 0.5% and 2.8%, respectively, while platinum dropped 0.8%.

At the Comex close: April gold slipped $5.60 to $1,910.90; May silver added 12 cents, to $22.04; April platinum dropped $7.60 to $997.30; and June palladium climbed $41 to $1,517.70 an ounce.