AGE Daily Gold Update

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

4/16/2024: Gold gains despite yields, dollar

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold gained 1.1% to close at $2,390.80, another record-high finish, despite rising yields and a stronger dollar as momentum buying and safe-haven inflows continue to trump fading rate-cut expectations. Silver fell 1.2% to $28.38 an ounce.

Fed Chair Jerome Powell said today that interest rates are likely to remain elevated because the economy and inflation are both hotter than expected. Recent data "have not given us greater confidence" that inflation is coming down, Powell told a DC think tank.

Separately, Fed Vice Chair Philip Jefferson reinforced Powell's higher-for-longer refrain, saying sharp increases in consumer prices and ongoing strength in the labor market signal an uncertain outlook for inflation in coming months.

Benchmark 10-year Treasury yields climbed to the highest level since early November as investors digested the dimming rate view. Fed fund futures traders now project only two rate cuts this year, down from three just weeks ago, with the first not coming until September at the earliest.

Tracking higher with yields, the dollar rose 0.1% against a basket of major rivals, notching a five-month high against the euro and hitting the highest level against the yen since 1990.

Ordinarily, increases in yields and the dollar weigh on gold, but bullish sentiment is carrying the metal to a succession of record highs despite these traditional headwinds. Gold is a global market. Demand is being driven by the worldwide appetite for hedges against currency risk and geopolitical uncertainty.

Platinum and palladium lost 0.6% and 1.2%, respectively.

At the New York spot close: gold gained $25 to $2,390.80; silver shed 34 cents to $28.38; platinum dipped $5.60 to $966.40; and palladium slid $12.70 to $1,031.20 an ounce.