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


3/5/2021: Gold dips on robust jobs report

Source: Bill Musgrave, American Gold Exchange

Austin — Gold dipped 0.1% to close under $1,700 for the first time since last June after strong jobs data boosted stocks, bond yields, and the dollar. The metal lost 1.8% for the week.

The US economy added 379,00 new jobs in February, more than double most forecasts, as the rollout of Covid vaccines and the pending $1.9 trillion relief package from Congress prompted employers to add workers in many sectors. The unemployment rate dropped to 6.3%.

Wall Street rallied hard after the jobs report, with all three major US indexes recovering from early sessions losses to post big gains. The Dow and S&P 500 rose 1.9% and 2%, respectively, while the tech-heavy Nasdaq added 1.6%.

The bond market route continued, with traders betting that the rebounding economy will stoke higher inflation. Benchmark 10-year Treasury yields touched the highest level in a year and finished above 1.55%. Higher yields are a headwind for gold since it offers no yield itself.

The dollar extended its rise, with the ICE index adding another 0.4% to yesterday's 0.7% to reach a three-month high. Forex traders speculate that rising employment and inflation will prompt the Fed to lift interest rates sooner than expected. Higher rates support the buck by attracting overseas money; a stronger dollar weighs on gold by making it pricier in other currencies.

But Fed officials continued to push back against the idea that monetary policy will tighten anytime soon. Echoing Jerome Powell's comments from yesterday, Atlanta Fed President Raphael Bostic and Cleveland Fed President Loretta Mester separately downplayed the excellent jobs data and emphasized that the economy still has a long way to go.

The other precious metals were lower for the day and mixed for the week. Silver dropped 0.7% for a weekly loss of 4.5%. Platinum slid 0.6% today and 4.8% this week. Palladium also dropped 0.6% but held on to a weekly rise of 0.7%

At the Comex close: April gold dipped $2.20 to $1,698.50; May silver 17 cents to $25.29; April platinum slid $7 to $1,128.30; and June palladium lost $13.70 to $2,329.10 an ounce.


3/4/2021: Gold falls on Powell comments

Source: Bill Musgrave, American Gold Exchange

Austin — Gold fell 0.9% to close just above $1,700 after comments by Fed Chair Jerome Powell caused Treasury yields and the dollar to spike higher, undercutting alternative assets. It was the metal's lowest finish since early last June.

Speaking at a Wall Street Journal webinar, Powell again dismissed concerns that the Fed's easy money policies and the Biden administration's $1.9 trillion pandemic relief bill will cause an overheated economy and runaway inflation.

Reiterating his position that the Fed is still "a long way" from its twin goals of maximum employment and stable 2% inflation, Powell said he is "monitoring" the recent rise in bond yields but signaled no inclination to stop it, calling it "not appropriate to isolate on particular interest rate or price."

Stocks and bonds sold off in response to Powell's passive approach. All three major US equity indexes lost more than 1% while benchmark 10-year Treasury yields, which move in opposite direction of bond prices, climbed back above 1.5%.

Disappointed traders had apparently been hoping for indications that the Fed would take concrete measures to lower yields, perhaps by extending the duration on the bonds it buys through quantitative easing.

Rising bond yields weigh on gold by increasing the opportunity cost for holding the non-yielding asset instead of bonds as a safe haven.

The dollar surged 0.7% against major rivals on speculation that Fed policies and fiscal spending will drive the US economy to recover more quickly than the eurozone and Japan. A stronger dollar pressures gold and other commodities by making them pricier in other currencies.

The other precious metals were also lower, with silver shedding 3.5% while platinum and palladium dropped 3.9% and 0.5%, respectively.

At the Comex close: April gold fell $15.10 to $1,700.70; May silver lost 93 cents to $25.46; April platinum tumbled $46.50 to $1,135.30; and June palladium slid $11.60 to $2,342.80 an ounce.


3/3/2021: Gold retreats as yields climb

Source: Bill Musgrave, American Gold Exchange

Austin — Gold retreated 0.7% to close under $1,722 despite some soft US data as bond yields and the dollar rose on optimism that the Biden stimulus package and vaccine rollout will spur economic growth and inflation.

The US services sector fell more than forecast in February, with restaurants, hotels, banks, and retailers still suffering from the pandemic. Comprising more than 70% of GDP, this crucial sector is expected to rebound quickly as vaccinations become widespread and more businesses reopen fully.

ADP reported the private sector added a tepid 117,000 new jobs in February, well below January's adjust total of 195,000.

Despite the downbeat data, the selloff in bonds continued, lifting benchmark 10-year Treasury yields back to nearly a 1-year high around 1.5%. Traders have been liquidating longer-duration Treasurys in recent weeks in anticipation that an additional $1.9 trillion in pandemic relief will fuel significantly higher prices for goods and services, undermining the future value of money locked up in bonds.

Even though gold is often purchased as a long-term store of value, rising yields have created headwinds for metal by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar added 0.2% against major rivals on expectations that additional stimulus will drive the US economy to recover more quickly than those of Europe or Japan. As lockdowns continue to pressure services industries, data indicates that the eurozone almost certainly has entered a double-dip recession.

The other precious metals were also lower, with silver dropping 2.1% while platinum and palladium fell 2.2% and 0.4%, respectively.

At the Comex close: April gold slid $12.10 to $1,721.50; May silver dropped 57 cents to $26.31; April platinum fell $32.60 to $1,186.80; and June palladium slipped $14.20 to $2,360 an ounce.


3/2/2021: Gold rises as yields, dollar fall

Source: Bill Musgrave, American Gold Exchange

Austin — Gold recouped 0.6% to close near $1,734 as weakness in bond yields and the dollar boosted demand for safe havens, drawing bargain-hunters into the market after yesterday's slide to a nine-month low.

US Treasury yields retreated from the one-year high hit last week, lifting prices, as another Fed official stepped forward to push back against fears of any premature tightening of monetary policy.

Fed Governor Lael Brainard warned today that "the economy remains far from our goals" for both employment and inflation. While a "burst" of inflation is expected as the recovery gains traction, it is likely to be transitory and will not encourage monetary tightening, she said in a talk with the Council on Foreign Relations.

Brainard joins Fed Chair Jerome Powell, Vice Chair John Clarida, and regional Fed Presidents James Bullard and John Williams in vocalizing recent assurances that monetary policy will be extremely accommodative for years to come, with interest rates scheduled to remain near zero through 2023.

Upbeat US data and vaccine rollouts have combined with the likelihood of more fiscal stimulus to spark concerns that rising inflation will prompt the central bank to tighten interest rates ahead of schedule. This expectation had lifted Treasury yields and strengthened the dollar in recent sessions while weighing on gold.

Higher bond yields create a headwind for gold in the short term by increasing the opportunity cost for holding it instead on bonds as a safe-haven asset. But rising inflation expectations, which have been a main driver behind the recent bond selloff, is typically supportive for gold in the longer term in its traditional role as an inflation hedge.

Responding to falling yields, the dollar fell 0.3% against major rivals, lifting gold and other commodities by making them less expensive in other currencies.

The other precious metals were also higher, with silver and palladium rising 0.8% while platinum 1.9%.

At the Comex close: April gold gained $10.60 to $1,733.60; May silver picked up 20 cents to $26.88; April platinum climbed $23.10 to $1,214.40; and June palladium added $19.60, to $2,368.60 an ounce.


3/1/2021: Gold slides after risk rally

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slipped 0.3% to close at $1,723 as optimism over stimulus and vaccines drove Wall Street to its best day in months, undercutting demand for safe-haven assets. The metal rose to an intraday high above $1,757 before retreating into its fifth straight down session.

The House approved the Biden administration's $1.9 trillion pandemic stimulus package on Saturday morning, passing the bill on to the Senate. Democratic lawmakers are pushing to have it signed into law by March 14, when federal unemployment benefits expire.

A vaccine from Johnson & Johnson received full approval from both the FDA and CDC over the weekend, opening the door for immediate, widespread distribution. The newest weapon in the pandemic fight requires only a single dosage, whereas the two vaccines currently in use require two shots several weeks apart.

Wall Street soared on the upbeat news. The Dow rallied 2.1% for its best day in four months, while the S&P 500 jumped 2.5%, its strongest session since last June. The Nasdaq surged 2.9% for its biggest percentage rise in a month.

Treasury yields and the dollar both rose as traders rotated toward risk, pressuring gold. Higher yields increase the opportunity cost for holding the metal; a stronger dollar makes it more expensive in other currencies, dulling overseas demand.

Also fueling risk sentiment, US manufacturing grew in February at its fastest pace since the pandemic began, with the ISM index jumping to a two year high above 60%. With the accelerating rollout of vaccines and additional stimulus in the pipeline, business leaders are increasingly optimistic about the recovery.

The other precious metals were higher, with silver adding 0.9% while platinum and palladium picked up 0.5% and 1.5%, respectively.

At the Comex close: April gold slid $5.80 to $1,723; May silver climbed 24 cents to $26.68; April platinum added $6, to $1,191.320; and June palladium rose $35.50 to $2,349 an ounce.


2/26/2021: Gold tumbles to 7-month low

Source: Bill Musgrave, American Gold Exchange

Austin — Gold fell 2.6% to close under $1,729, its lowest finish since last June, as the dollar rallied behind sharply higher bond yields, further pressuring alternative stores of value. The metal declined 2.7% this week and 6.6% this month for its biggest monthly drop in more than four years.

With the Biden administration's new $1.9 trillion pandemic relief bill on track for mid-March, traders are speculating that another staggering transfusion of easy money will drive inflation and risk assets much higher, potentially triggering early tightening from the Federal Reserve.

This so-called reflation trade has gripped the market in the past two weeks, driving yields on Treasury notes to the highest levels in more than a year yesterday. Higher yields pressure gold by increasing the opportunity cost for holding the metal instead on bonds as a safe-haven asset.

The Fed has repeatedly pushed back on the notion that rising inflation and bond yields will cause a shift in policy, saying the damaged economy and labor market will take years to heal. Nonetheless, traders are moving aggressively to price-in monetary tightening ahead of the central bank's forward guidance of holding interest rates near zero through 2023.

The dollar surged 0.8% against major rivals, lifted by rising bond yields and expectations of premature tightening. Higher interest rates lift the dollar by attracting Forex investors seeking higher returns. A stronger dollar, in turn, weighs on gold and other commodities by making the pricier in overseas markets.

The other precious metals were also lower for the session and mixed for the month. Silver shed 4.5% today and 1.8% in February. Platinum dropped 3.8% for the session but added 9.8% for the month. Palladium fell 4.2% today but rose 4.8% this month.

At the Comex close: April gold dropped $46.60 to $1,728.80; May silver lost $1.24 to $26.44; April platinum shed $46.20 to $1,185.30; and June palladium declined by $101.30 to $2,313.50 an ounce.


2/25/2021: Gold falls as bond yields surge

Source: Bill Musgrave, American Gold Exchange

Austin — Gold fell 1.3% to close under $1,776 as Treasury yields surged on upbeat data and rising inflation expectations, undercutting demand for alternative stores of value.

US durable goods orders jumped 3.4% in January, the biggest rise in six months, suggesting the economy was picking up steam at the end of 2020 despite the resurgent pandemic. Much of the rise came from military expenditure on aircraft and other hardware.

Yields on benchmark 10-year Treasurys surged briefly above 1.6% today, the highest level in more than a year, as investors sold off longer-duration bonds in anticipation of higher inflation. The spike followed an anemic response to the Treasury Department's auction of 7-year notes.

Inflationary pressures have been building over the past month as the vaccine rollout accelerates and the economy shows signs of recovery. While consumer prices have risen just 1.4% from a year ago through January, wholesale and import prices are sharply higher, implying more inflation is in the pipeline.

While higher inflation is considered bullish for gold as a long-term store of value, rising bond yields create short-term pressure by increasing the opportunity cost for holding the metal, which offers no yield itself, instead of sovereign debt as a safe-haven asset.

The dollar bounced off a seven-week low after Treasury yields jumped, as traders speculated that rising inflation could prompt the Fed to raise interest rates sooner than expected. A rising dollar weighs on gold and other precious metals by making them more expensive in other currencies, limiting overseas demand.

The other precious metals were also lower, with silver sliding 0.9% while platinum and palladium dropped 2.1% and 0.7%, respectively.

At the Comex close: April gold dropped $22.50 to $1,775.40; May silver lost 24 cents to $27.69; April platinum fell $26.40 to $1,231.50; and June palladium slid $16.70 to $2,414.80 an ounce.


2/24/2021: Gold slips on rising risk appetite

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slipped 0.4% to close under $1,798 after dovish comments from Jerome Powell stoked risk appetite, undercutting safe-haven assets. The metal hit an intraday higher above $1,813 before sliding back.

Testifying before Congress for a second day, the Powell underscored his commitment to ultra-loose monetary policies like quantitative easing and near-zero interest rates. He dismissed concerns that short-term spikes in inflation will trigger higher interest rates, saying it may take more than three years to meet the central bank's inflation goals.

Wall Street cheered the Fed Chair's assurances that the easy-money spigot will not soon be turned off. The Dow rallied 1.3% while the S&P 500 jumped 1% and the tech-heavy Nasdaq added 0.6%.

Safe-haven Treasuries sold off on the surge in risk appetite, lifting yields on benchmark 10-year notes above 1.4% for the first time in a year.

Although gold has come under in recent weeks because of rising bond yields, the combination of increased inflationary pressure and the Fed's commitment to easy money is bullish for the metal in the longer term. Near-zero interest rates and quantitative easing pressure the dollar by making it less attractive to Forex traders seeking higher returns. A weaker dollar, in turn, supports gold and other commodities by making them less expensive overseas.

The other precious metals were higher, with silver rising 0.6% while platinum and palladium added 1.5% and 3.7%, respectively.

At the Comex close: April gold dropped $8 to $1,797.90; March silver picked up 17 cents to $27.86; April platinum climbed $18.20 to $1,257.90; and June palladium climbed $86.80 to $2,431.50 an ounce.


2/23/2021: Gold dips on data, Powell view

Source: Bill Musgrave, American Gold Exchange

Austin — Gold dipped 0.1% to close under $1,806 as the Dow and the dollar rebounded on upbeat data and Fed Chair Jerome Powell's testimony before Congress, pressuring alternative stores of value.

Speaking before the Senate Banking Committee, Powell expressed confidence in the economy and pushed back on concerns that faster growth will trigger sharply higher inflation. Asserting that the economy is still "a long way from our employment and inflation goals," the Fed Chair promised quantitative easing and near-zero interest rates will continue for the foreseeable future.

Wall Street bounced from deep losses on Powell's assurances that easy money policies will remain in place. The Dow surged from a loss of 4% early in the session to gain as much as 0.3%, its biggest comeback in two months. Gold retreated from an intraday high above $1,815 as risk appetite was rekindled.

Supporting the rebound in equities, consumer confidence climbed to a three-month high in February as many Americans received $600 stimulus checks and the vaccine rollout accelerated.

The dollar rose from six-week lows against major rivals on the upbeat outlook, weighing on gold and other commodities by making them pricier in other currencies.

Gold's dip was backstopped by falling Treasury yields after Powell dismissed worries that higher inflation would push the central bank to raise interest rates. Lower yields support gold by reducing the opportunity cost for holding it instead on bonds as an inflation hedge and safe-haven asset.

The other precious metals were also lower, with silver dropping 1.4% while platinum and palladium fell 3.3% and 2.4%, respectively.

At the Comex close: April gold dipped $2.50 to $1,805.90; March silver lost 40 cents to $27.69; April platinum fell $42.60 to $1,239.70; March palladium dropped $57 to $2,335.10 an ounce.


2/22/2021: Gold surges on inflation view, dollar

Source: Bill Musgrave, American Gold Exchange

Austin — Gold surged 1.8% to close near $1,809 as upbeat economic prospects stoked worries about higher inflation while a weaker dollar lifted demand for alternative stores of value. It was the metal's highest finish in a week.

With the Biden administration's $1.9 trillion stimulus package working its way through Congress, and with COVID-19 vaccinations picking up steam at home and abroad, economists increasingly anticipate that the recovery will accelerate in coming months. Consumer, wholesale, and import prices have all risen sharply in the past month as the economy regains its footing.

Reinforcing this optimistic view of the economy, the Conference Board reported its index of leading indicators rose in across all sectors in January, posting its third straight monthly increase.

Bond prices continue to deteriorate, lifting yields, as traders expect faster growth to stimulate higher inflation. Benchmark 10-year Treasury yields rose to nearly a one-year high and 30-year TIPS, which offer inflation-adjusted yield, turned positive for the first time since June.

Rising bond yields can create headwinds for gold by increasing the opportunity cost for holding the metal, which offers no yield. But the rising inflation expectations that are driving bond yields also support a higher gold price as investors seek out long-term stores of value. Gold is widely viewed as a hedge against inflation and currency devaluation.

Also helping gold, risk appetite lessened as inflation and rising bond yields amplify concerns about excessive stock market valuations. The Nasdaq tumbled 2.2% as investors rotated away from high-flying tech stocks.

The dollar fell 0.4% against major rivals on improving outlooks in European economies. A falling dollar supports gold and other commodities by making cheaper in other currencies.

And finally, oil rallied more than 4.1% on speculation that Texas production will be limited by last week's crippling freeze. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were mixed, with silver jumping 2.4% while platinum lost 1.2% and palladium added -.6%.

At the Comex close: April gold gained $31.20 to $1,808.60; March silver climbed 66 cents to $27.92; April platinum dropped $10.80 to $1,277.40; and March palladium rose $22.90 to $2,384 an ounce.

  

Metal Ask      Change
Gold $1,703.56           Price Change Up Arrow $0.00
Silver $25.37           Price Change Up Arrow $0.00
Platinum $1,142.84           Price Change Up Arrow $0.00
Palladium $2,375.55           Price Change Up Arrow $0.00
In US Dollars

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