AGE Daily Gold Update

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

4/8/2024: Gold gains on dollar, bank buys

Source: Bill Musgrave, American Gold Exchange

Austin — Extending last week’s 5% rally, New York spot gold added another 0.2% to close above $2,331 despite higher yields as the dollar slipped ahead of this week’s CPI print, boosting alternative stores of value. Strong central bank buying also propelled the gold price. Silver surged 1.1% to close at $27.81 an ounce.

The People’s Bank of China reported purchasing 5 tonnes of gold in March, adding to its aggressive campaign to diversify its holdings away from G7 currencies. In February, China bought 22 tonnes, according to the World Gold Council. Kazakhstan, Turkey, and several easter European countries also bought gold in March.

Global central banks have purchased record amounts of gold over the past two years, lending strong support to the global gold price. Like individual investors, central banks buy gold as a hedge against rising geopolitical turmoil and currency risks.

Benchmark 10-year Treasury yields crept above 4.42% as traders speculate that the Fed may delay rate cuts until the summer and cut fewer times this year. Higher yields are a headwind for gold because they increase the opportunity cost for holding it instead of bonds for safety.

Fed fun futures traders now see the odds of a June cut at slightly less than 50/50, down from around 60/40 in favor a week ago. And rather than 75 basis points in cuts this year, they now expect 60.

But the dollar slipped 0.2% despite higher yields as investors look toward this week’s release of the March consumer price index for direction on monetary policy. A weaker dollar lifts gold and other commodities by making them cheaper in other currencies.

Platinum and palladium jumped 3.7% and 4.3%, respectively.

At the New York spot close: gold gained $6 to $2,331.70; silver added 30 cents, to $27.81; platinum picked up $34.60 to $964.70; and palladium rose $43.10 to $1,050.50 an ounce.