AGE Daily Gold Update

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

3/22/2019: Gold rises for third weekly win

Source: Bill Musgrave, American Gold Exchange

Austin — Gold rose 0.4% to close above $1,312 as weak manufacturing data in the US and Europe stoked safe-haven demand despite a stronger dollar. The metal finished the week 0.7% higher for its third straight weekly gain.

The HIS Markit flash purchase mangers index for US manufacturing fell to a 21-month low in March, the latest sign that growth is slowing. Factory goods production hit a 33-month low and new orders also fell as business sentiment soured and exports slackened. The Markit PMI for service industries also slid to a two-month low.

The yield curve on spreads between 3-month US Treasury bills and 10-year notes inverted for the first time since 2007, meaning short-term bonds are yielding more than medium term bonds. Recessions have followed the last nine times this curve has inverted, according to the San Francisco Fed.

The US ran the largest monthly budget deficit ever in February, a shortfall of $234 billion, leading the CBO to project an annual deficit of $897 billion, or 4.2% of GDP.

Eurozone manufacturing also weakened, with the Markit PMI falling more than expected as the region risks falling into recession. Germany, the bloc's largest economy, plunged to the lowest reading in more than six years.

Capping gold's gains, the dollar rose 0.7% against major rivals as worrisome Eurozone data undermined the euro, driving Forex investors into safer havens. A rising dollar typically weighs on gold and other commodities by making them more expensive overseas.

The other precious metals were lower for the day and mixed for the week. Silver dipped 0.2% but held onto a weekly gain of 0.5%. Platinum dropped on the day 1.5% but rose 2% on the week. Palladium fell 2.7% today and 0.2% this week.

At the Comex close: April gold gained $5 to $1,312.30; May silver slid 3 cents to $15.41; April platinum fell $12.70 to $848.40; and June palladium lost $42.40 to $1,515.50 an ounce.

3/21/2019: Gold gains on Fed rate view

Source: Bill Musgrave, American Gold Exchange

Austin — Gold gained 0.4% to close above $1,307 following yesterday's dovish policy statement from the Federal Reserve. The metal surged as high as $1,320 before rising risk appetite and a rebounding dollar caused traders to take profits.

The Fed signaled the end of monetary tightening at this week's meeting, calling for no rate hikes in 2019 and perhaps one in 2020. In addition, the central bank will stop unwinding its balance sheet by September, ending the program of quantitative tightening that began in October 2017.

The dollar initially fell 0.9% on the dovish Fed turn, supporting sharply higher prices for gold and other commodities priced in dollars for global trade by making them less overseas.

The buck rebounded today, however, adding 0.6% against major rivals after the UK pound plunged 1.1% on a Brexit ultimatum from the European Union. The EU said it will allow a Brexit extension until late May only if PM Theresa May's plan for leaving the union, which has been rejected three times, is approved as it stands. Otherwise, Britain crashes out without a trade agreement next week.

US equities rallied on the Fed's shift in policy, further capping gold's gains, with the Dow rising 0.8% and Nasdaq 1.4%.

The other precious metals were mostly higher, with silver and platinum rising 0.8% and 0.2%, respectively, while palladium fell 0.2%.

At the Comex close: April delivery gold gained $5.60 to $1,307.30; May silver rose 12 cents to $15.44; April platinum added $1.50, to $861.10; and June palladium slipped $2.50 to $1,557.90 an ounce.

3/20/2019: Gold dips, surges after Fed

Source: Bill Musgrave, American Gold Exchange

Austin — Gold dipped 0.4% to close just under $1,301 ahead of the Fed's release of its post-meeting statement on monetary policy. The metal then surged above $1,315 in electronic trade after the Fed downgraded its growth outlook and delivered a surprisingly dovish message on rates, weakening the dollar and boosting demand for alternative stores of value.

While leaving interest rates unchanged, the FOMC pivoted emphatically away from the tighter monetary policy that has dominated its approach for the past two years. After three rate hikes in 2017 and four in 2018, the Fed now projects no hikes for 2019. As recently as December, the forecast called for three hikes this year.

Although it described the economy as being "in a good place," the Fed lowered its growth forecast to 2.1% from 2.3% for 2019 and cut its PCE inflation forecast to 1.8%.

Adding to its dovish shift, the central bank announced that it will stop unwinding its balance sheet by September. Known as "quantitative tightening," the program of selling the Treasurys accumulated during the Great Recession is viewed, like higher interest rates, as a drag on the economy.

The dollar immediately tumbled 0.5% to a three-month low after the Fed's statement. Tighter monetary policy has been a main source of support for the buck in recent years, attracting Forex investors seeking higher yields. A weaker dollar should prove bullish for gold by making it less expensive in other currencies. US Treasurys also rallied, pushing yields 10-year yields to a 15-month low.

The other precious metals were mixed before and mostly higher after the Fed's statement. Silver slid 0.4%, then bounced 20 cents higher in electronic trade. Platinum rose 0.8% and then another 0.7% after the Fed. Palladium rose 0.6% and held its gains after hours.

At the Comex close: April fell $4.80 to $1,301.70; May silver dropped 5 cents to $15.32; April platinum picked up $7 to $859.60; and June palladium rose $8.50 to $1,560.40 an ounce.

3/19/2019: Gold gains on dovish rate view

Source: Bill Musgrave, American Gold Exchange

Austin — Gold gained 0.4% to close above $1,306 as expectations for a dovish Fed rate view pressured the dollar, boosting demand for alternative stores of value.

Beginning its two-day meeting on monetary policy today, the Federal Reserve is widely expected to keep rates unchanged and reinforce its patient stance on future rates hikes. Most Fed officials, including Chair Jerome Powell, have recently stated that slowing global growth and softer inflation are reasons to adopt a wait-and-see approach.

The dollar fell back 0.2% against major rivals as traders speculated that the future course of rate policy may, in fact be toward cuts instead of raises. Fed fund futures traders are pricing in a 15% probability of a rate decrease by December. Flat or lower rates would remove a substantial support for the dollar, which would be bullish for gold as it becomes less expensive overseas when the dollar weakens.

Also pressuring the buck, factory orders rose a mere 0.1% in January, well-short of forecasts, in another sign that GDP has slowed in the first quarter. The Atlanta Fed forecasts 0.4% real GDP growth.

The other precious metals were also higher, with silver adding 0.3% while platinum and palladium rose 2.2% and 0.8%, respectively.

At the Comex close: April gold gained $5 to $1,306.50; May silver added 5 cents, to $15.37; April platinum jumped $18.60 to $852.60; and June palladium rose $12.20 to $1,551.90 an ounce.

3/18/2019: Gold near-flat as stocks rise

Source: Bill Musgrave, American Gold Exchange

Austin — Gold was nearly flat, edging down 0.1% to close under $1,302, as rising risk appetite offset a slightly softer dollar and rising oil prices.

The dollar inched down less than 0.1% against major rivals as traders largely treaded water ahead of this week's Fed meeting on monetary policy. The UK pound weakened after a third vote on PM Theresa May's Brexit plan was blocked in Parliament, while the euro rose behind a 1.5-billion-euro trade surplus in January.

US equities rose on expectations that the Fed will keep monetary policy unchanged and reiterate its dovish wait-and-see posture toward future rate hikes. The end of rising rates can lift corporate profits by holding down borrowing costs for capital investment. The Dow gained for a fourth session and both the S&P 500 and Nasdaq hit 52-week highs, pulling investors away from alternative assets.

Gold's slide was backstopped after West Texas crude oil rose 0.5% to just under $59 per barrel, a four-month high, after OPEC announced it would defer action on production cuts until June. Rising oil supports gold as a hedge against energy-related inflation.

The other precious metals were mixed, with silver dipping less than a cent while platinum and palladium, more tightly tied to industry, rose 0.3% and 1.4%, respectively.

At the Comex close: April gold slid $1.40 to $1,301.50; May silver dipped less than a penny to $15.32; April platinum added $2.20, to $834; and June palladium gained $21.20 to $1,538.70 an ounce.

3/15/2019: Gold gains for day, week

Source: Bill Musgrave, American Gold Exchange

Austin — Gold rose 0.6% to close near $1,303 as mixed US data and upbeat Brexit news weakened the dollar, boosting demand for alternative stores of value. The metal finished the week with a gain of 0.3%.

US manufacturing fell for a second month in February, missing forecasts as trade conflicts and slowing global growth took their toll, according to Fed data. Separately, the Empire State manufacturing index dropped sharply in March. The weak data is likely to reinforce the Fed's patient posture toward further rate hikes as it meets next week.

Consumer sentiment perked up in March, however, beating estimates.

Britain's Parliament supported a stop-gap measure to extend the Brexit deadline from March 29 to the end of June, provided PM Theresa May's twice-defeated plan can pass in a third vote next week. The tenuous support was enough to rally the pound 0.3% against the dollar, helping to push the greenback 0.8% lower for the week. A weaker dollar supports gold and other commodities by making them less expensive overseas.

Gold was also lifted by safe-havens inflows after immigrant-hating terrorists killed 49 Muslims in two New Zealand mosques.

The other precious metals were higher for the day but mixed on the week. Silver rose 1% today but slipped 0.2% this week. Platinum added 0.6% for a weekly rise of 1.7%. Palladium rose 0.3% today and 4.1% this week.

At the Comex close: April god gained $7.80 to 1,302.90; May silver climbed 15 cents to $15.32; April platinum added $4.70, to $831.80; and June palladium rose $3.90 to $1,518.50 an ounce, another record.

3/14/2019: Gold falls on profit-taking, Brexit

Source: Bill Musgrave, American Gold Exchange

Austin — Gold fell 1.2% to close just above $1,295 as traders took profits from yesterday's jump to a two-week high above $1,308 and the dollar strengthened on Brexit uncertainty, dulling demand for alternate stores of value.

The British Parliament voted yesterday to rule out a so-called hard Brexit, or a departure from the EU without a trade treaty in place. The vote raised hope that Brexit would be delayed past its March 29 deadline, boosting the pound and weakening the dollar, which lifted gold in turn.

But Brexit concerns crept back into trading today when Parliament signaled that it may not approve the Brexit delay, driving the pound down 0.8% against the dollar. A rising dollar pressured gold and other commodities by making them more expensive overseas.

Weak data from China also weighed on gold. Industrial output slowed in the January-February period, indicating that the world's second-largest economy is off to a slow start to 2019. Weakness in China's economy undermines global gold demand because China is the world's largest buyer of gold and most other commodities.

The other precious metals were mostly lower, with silver and platinum dropping 1.8% and 1.7%, while outlier palladium rose 0.5%.

At the Comex close: April gold fell $14.20 to $1,295.10; May silver lost 29 cents to $15.17; April platinum dropped $14.60 to $827.10; and June palladium rose $7.90 to $1,514.60 an ounce, a new record.

3/13/2019: Gold jumps on Brexit, PPI

Source: Bill Musgrave, American Gold Exchange

Austin — Gold gained for a second session, jumping 0.8% to close at a two-week high above $1,308, as Brexit uncertainty and soft wholesale inflation pressured the dollar, boosting demand for safe-haven assets.

British Prime Minister Theresa May's Brexit plan was rejected by Parliament late yesterday, setting up a vote today on whether Britain will crash out of the EU later this month with no trade agreement in place. The so-called "hard Brexit," considered the worst-case scenario, would be chaotic and damaging to the economies of both the UK and EU.

The British pound jumped on expectations that Parliament will postpone Brexit altogether rather than risk the fallout of a hard Brexit, pushing ICE Dollar Index down 0.3%. A weaker dollar supports gold and other commodities priced in it for global trade by making them less expensive overseas.

Also pressuring the dollar, US wholesale inflation was tame in February, with the Producer Price Index rising just 0.1%. The 12-month increase fell to 1.9%, far lower than last summer's 3.4%. The recent downtrend in prices decreases the likelihood that the Fed will raise interest rates this year.

US stocks also rose on the soft PPI, with the S&P 500 and Nasdaq both jumping around 0.8% as lower interest rates are expected to boost corporate profits by decreasing borrowing costs.

The other precious metals also rose, with silver adding 0.5% while platinum and palladium climbed 1.7% and 0.8%, respectively.

At the Comex close: April gold gained $10.40 to $1,308.50; May silver rose 7 cents to $15.49; April added $9.80, to $845.90; and June palladium climbed $16.70 to $1,502.10 an ounce.

3/12/2019: Gold gains on soft CPI

Source: Bill Musgrave, American Gold Exchange

Austin — Gold gained 0.5% to close above $1,298 as soft US inflation weakened the dollar, boosting demand for alternative stores of value.

The Consumer Price Index rose 0.2% in February, driven by higher costs for rent, food, clothing and gasoline. Overall the past 12 months, however, inflation slowed to 1.5%. The so-called core CPI, stripping out volatile food and energy prices, edged up 0.1% for the smallest rise since August.

The dollar retreated 0.3% against major rivals as traders speculated that modest inflation will encourage the Fed to wait and see on further rate hikes. A weaker dollar typically supports gold and other commodities priced in it for global trade by making them less expensive in other currencies.

The buck's slide was backstopped by a falling UK pound after Theresa May's Brexit deal lost in Parliament for the second time.

US equities edged higher on the dovish outlook for US interest rates, with the S&P 500 adding 0.3% and the Nasdaq 0.4%. The Dow fell 0.4%, however, after Boeing stock plunged nearly 6% following the second crash in six months of one of its most popular jetliners, which prompted several countries to ground the planes.

The other precious metals were also higher, with silver climbing 0.9% while platinum and palladium rose 1.9% and 0,5%, respectively.

At the Comex close: Gold for April gained $7 to $1,298.10; May silver rose 14 cents to $15.41; April platinum climbed $15.10 to $831.90; and June palladium picked up $8 to $1,490 an ounce.

3/11/2019: Gold slides on data, risk rally

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slid 0.6% to close under $1,292 as upbeat US economic data spurred risk appetite, dulling demand for safe havens.

US retail sales rose 0.2% in January, bouncing back from a revised 1.6% decline in December, the biggest in 10 years. With auto and gasoline sales factored out, January's rise was a more impressive 1.2%.

Business inventories increased 0.6% in December, according to a Commerce Department report delayed by the government shutdown in January. Rising inventories often imply an expanding economy. However, sales fell 1% for the month.

Wall Street rallied on the improved data, with the S&P 500 jumping 1.2% and Nasdaq 1.8%.

The dollar edged lower, pressured by dovish comments from Jerome Powell. Appearing on 60 Minutes, the Fed Chair said the economy is "in a good place" right now and reiterated his position that interest rates do not need to change until new data points the way. Consistent rate hikes over the past two years have been an ongoing source of support the for the buck.

Global central banks continued aggressive gold purchases in January, adding a net 35 tonnes to gold reserves, according to World Gold Council data. It was the strongest January on record and continues a bullish trend from 2018, when central banks purchased more than 651 tonnes, the most in more than 20 years. Buying was concentrated in emerging markets as a diversification away from the dollar.

The other precious metals were mostly lower, with silver and platinum dropping 0.5% and 0.1%, respectively, while palladium rose 1.6%.

At the Comex close: April gold slid $8.20 to $1,291.10; May silver dropped 8 cents to $15.27; April platinum dipped 80 cents to $816.80; and June palladium rose $23 to $1,482 an ounce.