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


3/17/2023: Gold surges to 11-month high

Source: Bill Musgrave, American Gold Exchange

Austin — Gold surged another 2.6% to an 11-month high above $1,973 as the dollar and bond yields fell on weak US data and renewed fears of contagion in the banking sector. The metal rallied 5.7% for the week, its biggest weekly advance since April 2020.

After a brief respite yesterday, concerns about the stability of the global banking system returned today. Credit Suisse and First Republic Bank tumbled again on Wall Street despite massive transfusions of cash intended to prop them up, to the former by the National Bank of Switzerland and to the latter by a consortium of gigantic US banks.

Echoing the financial crisis of 2008, government institutions are scrambling to prevent further turmoil. The Treasury Department brokered the First Republic deal. The Federal Reserve loaned $165 billion to struggling US banks on Thursday through an emergency program.

Last year's surge in interest rates caused many lenders to rack up huge losses as they were forced to refinance debt at sharply higher rates. These losses, along with an old-fashioned run on deposits, caused Signature Bank and Silicon Valley Bank to fail last week, and First Republic to stumble this week.

Against this uncertain backdrop, more signs are pointing toward the possibility of recession this year. The Conference Board's leading economic indicator index fell 0.3% in February, marking the eleventh consecutive month of declines, a streak consistent with impending recession.

Separately, consumer sentiment weakened for the fourth straight month, according to the University of Michigan index, as Americans fret about their finances and the broader economy.

Benchmark 10-year Treasury yields tumbled under 3.4% as investors fled into the perceived safety of government bonds. Rate-sensitive 2-year yields dropped under 3.9% on expectations that the Fed will be less aggressive in coming months because of the banking turmoil.

Fed fund futures traders put the odds of a quarter-point hike next week at 63%, with a 37% chance that the Fed will not hike at all. Yesterday, the odds of a quarter-point were 80%, with a 20% chance of no hike.

The dollar fell 0.6% against major rivals, tracking lower with yields and the softening rate view. A weaker dollar supports gold and other commodities by making the less expensive on other currencies.

The other precious metals were mixed for the day but higher for the week. Silver jumped 3.5% to day and 9.5% this week. Platinum picked up 0.1% for a weekly rise of 1.7%. Palladium slid 1.7% but still added 1.8% this week.

At the Comex close: April gold surged $50.50 to $1,973.50; May silver jumped 77 cents to $22.46; July platinum added $1.5, to $978.60; and June palladium dropped $23.20 to $1,386.10 an ounce.

  

Metal Ask      Change
Gold $2,238.49           Price Change Up Arrow $37.70
Silver $25.14           Price Change Up Arrow $0.32
Platinum $919.18           Price Change Up Arrow $8.82
Palladium $1,051.24           Price Change Up Arrow $22.65
In US Dollars