AGE Daily Gold Update

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

4/16/2021: Gold rallies 2% for the week

Source: Bill Musgrave, American Gold Exchange

Austin — Gold rallied another 0.8% to close above $1,780, the highest level in nearly two months, as a falling dollar and rising geopolitical tensions fueled demand for alternative assets despite upbeat US economic data. The metal ended the week 2% higher for its biggest weekly rise since mid-December.

President Biden hit Russia with stiff sanctions yesterday for hacking US corporations and government offices, election interference, and other "malign activities." Designed to be quite costly to the Russian economy, the penalties are expected to provoke retaliation and increase tensions between the two nations.

Meanwhile, reports on the US recovery continue to be strong. Consumer sentiment rose to a 13-month high this month, according to the University of Michigan survey, as stimulus checks and the rollout of vaccinations buoy optimism that normalcy is returning. Housing starts jumped nearly 20% in March, signaling a resurgence in this crucial sector.

Wall Street marched higher on the upbeat data and strong quarterly earnings. The Dow and S&P 500 added 0.5% and 0.4%, respectively, to new record highs, while the Nasdaq edged up 0.1%.

Treasury yields edged slightly higher on the rising risk sentiment but still hover near a one-month low. Weaker yields have spurred gold's rally this week by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar pulled back again, dropping 0.2% against major rivals. Pressured by falling yields, the buck fell 0.7% for the week to hit one-month low, lifting gold and other commodities priced in it for global trade by making them less expensive in other currencies.

The other precious metals were higher for the day and mixed for the week. Silver added 0.5% for a weekly rise of 3%. Platinum climbed 0.7% today but dipped $1 this week. Palladium jumped 1.3% for a weekly increase of 5%.

At the Comex close: June gold added $13.40, to $1,780.20; May silver rose 14 cents to $26.11; 3% weekly rise; July platinum picked up $8.50 to $1,208.70; and June palladium jumped $35.30 $2,774.70, another record high.

4/15/2021: Gold soars to 7-week high

Source: Bill Musgrave, American Gold Exchange

Austin — Gold soared 1.8% to close near $1,767 as upbeat US economic data lifted inflation expectations while bonds yields declined, prompting investors to seek hedges against rising prices. It was the metal's highest finish since late February.

US retail sales skyrocketed by nearly 10% in March, far more than forecast, as vaccinations and the improving labor market gave Americans the confidence to go out and spend. The arrival of stimulus checks and extended jobless benefits helped by putting cash into people's hands.

First-time unemployment filings tumbled by 193,000 last week to 576,000, the lowest level of the pandemic. Another 132,000 filed through temporary federal programs, also a pandemic low.

Wall Street jumped on the good news, with the Dow and S&P 500 adding around 1% to reach new all-tech highs while the Nasdaq rose 1.3%.

Treasury yields rolled back again despite the rising risk sentiment. Typically, risk appetite prompts investors to sell bonds to finance equity purchases, lifting yields. At the same time, strong economic growth often raises inflation expectations, spurring traders to demand more for tying up cash for extended periods, further raising yields.

But traders have apparently taken to heart the Fed's repeated assurances that rates will remain near zero for years to come despite higher prices for goods and services. The combination of rising inflation and near-zero interest rates is bullish for gold, which thrives as an inflation hedge when it does not have to compete with rising bond yields.

Oil rose for a fourth session, with WTI crude adding to 0.5% to reach a month-high near $63.50 per barrel on rising demand and diminishing US reserve stockpiles. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were also higher. Silver rose 1.7% while platinum and palladium climbed 1.9% and 2.2%, respectively.

At the Comex close: June gold soared $30.50 to $1,766.80; May silver jumped 44 cents to $25.96; July platinum rose $22.80 to $1,200.20; June palladium added $60, to $2,739.40 an ounce.

4/14/2021: Gold dips as yields edge up

Source: Bill Musgrave, American Gold Exchange

Austin — Gold dipped 0.7% to close under $1,734 as higher inflation an upbeat Beige Book lifted Treasury yields, undercutting alternative stores of value.

Import prices surged 1.2% in March as demand for goods and services outstripped supply, adding to consumer inflation. The cost of imports has jumped nearly 7% over the last 12 months, the fastest pace in more than eight years.

Treasury yields edged higher on the inflation data, pressuring gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset. Expectations of higher prices spur bond traders to sell lower-yielding securities as they demand higher returns to tie up money that will erode in future value.

The Fed's Beige Book reported the economy grew faster in the early spring, with economic activity accelerating to a "moderate pace" as companies rehired and consumers received stimulus checks from the Biden relief package.

Gold's slide was backstop by a weaker dollar, which retreated 0.2% to a three-week low after Fed Chair Jerome Powell said the Fed will begin tapering its $120 billion in monthly bond purchases well in advance of raising interest rates. A weaker dollar supports gold by making it less expensive overseas.

The other precious metals were mixed, with silver and platinum adding 0.4% and 1.8%, respectively, while palladium dropped 0.7%.

At the Comex close: June gold dropped $11.30 to $1,736.30; May silver added a dime, to $25.52; July platinum picked up $20.30 to $1,177.40; and June palladium fell $17.50 to $2,679.40 an ounce.

4/13/2021: Gold jumps with sharply higher CPI

Source: Bill Musgrave, American Gold Exchange

Austin — Gold jumped 0.9% to close near $1,748 as sharply higher consumer prices stoked demand for the metal in its traditional role as a hedge against inflation.

The Consumer Price Index surged 0.6% in March, its fourth straight monthly rise, to push the yearly inflation rate to 2.6%, the highest since the fall of 2018. The so-called core inflation rate, stripping out volatile food and energy costs, rose a more modest 0.3%.

Treasury yields pulled back despite the strong CPI as traders seem to be taking to heart the Fed's repeated pledges to leave interest rates near zero for years to come despite higher inflation. Weaker yields support gold by reducing the opportunity cost for holding it instead of bonds as a safe-haven asset.

As if on cue, Philly Fed President said today that the Fed does not expect the economy to overheat and produce runaway inflation. Reinforcing recent statements by Fed Chair Jerome Powell and other FOMC members, Harker said the Fed will keep continue to stimulate the recovery with easy money policies.

Anticipation of premature tightening had been a primary driver of higher yields over the past two months, weighing on gold. This sentiment appears to be changing.

Tracking with lower with yields, the dollar fell 0.3% to a three-week low against major rivals, lifting gold and other commodities priced in it for global trade by making them less expensive in other currencies.

The other precious metals were mostly higher, with silver and palladium rising 2.3% and 0.9%, respectively, while platinum slid 1.5%.

At the Comex close: June gold jumped $14.90 to $1,747.60; May silver climbed 56 cents to $25.43; July platinum dropped $17.70 to $1,157.10; and June palladium picked up $25 to $2,696.90 an ounce.

4/12/2021: Gold slides as bond yields rise

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slid 0.7% to close at a one-week low under $1,733 as a bump in Treasury yields prompted traders to take profits from last week's 1% rise.

Treasury yields crept higher on renewed concerns about inflation, with the benchmark 10-year yield adding two basis points to climb above 1.68%. Fed Chair Jerome Powell said on 60 Minutes last night that the economy is "at an inflection point" that will lead to sharply higher growth in coming quarters, which is likely to increase price pressure.

Powell also said that the central bank is committed to keep interest rates near zero until the economy is "back to maximum employment" and inflation is "on track to move above 2% for some time."

While rising inflation is typically bullish for gold as a long-term store of value, it also spurs investors to demand higher returns for tying up their money, lifting yields. Higher yields present a headwind for the metal by increasing the opportunity cost for holding it instead of bonds.

Key information is expected this week when the government releases its updated consumer price index. The producer price index released last week showed wholesale inflation jumping 1% in March.

Meanwhile, the US budget deficit doubled to $660 billion in March as $1,400 pandemic relief checks were sent out. The deficit soared to a record $3 trillion last year, pushing the national debt to more than $28 trillion currently. Excessive debt can weigh on economic growth and undermine the dollar.

The other precious metals were mostly lower, with silver and platinum dropping 1.8% and 2.9%, respectively, while palladium added1.4%.

At the Comex close: June gold slid $12.10 to $1,732.70; May silver lost 46 cents to $24.87; July platinum fell $34.50 to $1,174.80; and June palladium added $35.90, to $2,671.90 an ounce.

4/9/2021: Gold slips into 1% weekly gain

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slipped 0.8% to close under $1,745 after sharply higher wholesale inflation lifted bond yields and the dollar, undercutting demand for alternative stores of value. The metal still gained 1% for the week, lifted by dovish Fed minutes released on Wednesday.

US producer prices surged 1% in March to post a 12-month rise of 4.2%, the most since September 2011, as energy costs jumped and supply chains remained strained by the pandemic. The so-called core PPI, stripping out volatile food and energy prices, rose a more modest 0.6% for the month and 3.1% year-on-year.

Treasury yields jumped, too, with benchmark 10-year yields pushing back up to 1.66% as investors reacted to the threat of sharply higher inflation. Bond traders typically sell long-dated securities in highly inflationary environments, demanding higher yields for tying up cash that may erode in value.

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, are also bullish for gold in the longer term in its traditional role as an inflation hedge.

The Fed reinforced its commitment to extreme easy-money policies in minutes from the latest FOMC meeting, released this week. Interest rates are forecast remain to unchanged through 2023, and $120 billion per month in quantitative easing will continue for an unlimited period. This highly accommodative stance is bullish for gold because it pressures the dollar and keeps real interest rates negative.

The dollar tracked higher with yields, adding 0.1% against major rivals. A stronger buck pressures gold and other commodities by making them more expensive in other currencies, driving down overseas demand.

The other precious metals were mixed for the day and week. Silver lost 1% today but rose 1.3% this week. Platinum fell 2.1% but eked out a weekly rise of 0.1%. Palladium added 0.3% but still lost 0.7% this week.

June gold slipped $13.40 to $1,744.80; May silver lost 26 cents to $25.33; July platinum dropped $26.10 to $1,209.30; and June palladium added $7.70, to $2,636 an ounce.

4/8/2021: Gold surges on jobless claim, Fed

Source: Bill Musgrave, American Gold Exchange

Austin — Gold surged 1% to close above $1,758 as weak jobs data drove yields and the dollar lower, boosting demand for alternative stores of value. It was the metal's highest finish in six weeks.

Initial jobless claims rose unexpectedly last week, with 744,000 newly unemployed Americans filing for benefits through the states and another 151,000 though a temporary federal relief program. It was the second straight week of rising claims.

More than 16 million people are receiving ongoing unemployment benefits, compared to fewer than 2 million before the pandemic began.

Treasury yields rolled back as the sobering data pushed investors back toward safe-haven assets. Lower yields support gold reducing the opportunity cost for holding it instead of bonds.

The dollar fell to a two-week low, losing 0.4% as Forex traders took to heart the Fed's message, evident in in yesterday's FOMC minutes, that near-zero interest rates and quantitative easing will remain in place for years to come. A weaker dollar buoys gold and other commodities by making them less expensive in other currencies, lifting overseas demand.

The other precious metals were also higher, with silver rising 1.3% while platinum and palladium added 0.3% each.

At the Comex close: June gold surged $16.60 to $1,758.20; May silver gained 34 cents to $25.59; July platinum picked up $3.50 to $1,235.40; and June palladium climbed $7.20 to $2,628.30 an ounce.

4/7/2021: Gold dips on profit-taking

Source: Bill Musgrave, American Gold Exchange

Austin — Gold inched down 0.1% to close under $1,742 on profit-taking as minutes from the Fed's last meeting reinforced its easy-money stance while yields, the dollar, and stocks all treaded water. The metal had rallied around 3.6% over the previous four sessions on receding Treasury yields.

The minutes from the latest FOMC meeting underscored the central bankers' commitment to keeping the cash spigot wide open. Interest rates will remain near zero through 2023 and quantitative easy will continue at $120 billion per month until the economy achieves full employment and inflation holds above 2% for an extended period.

While "several" members voiced concern about rising inflation, the majority held that structural circumstances would result in "more downward pressure on inflation than expected." The Fed's new framework, unveiled last fall, pledges to allow inflation to remain above 2% for as long as it had been under.

Rising inflation with near-zero interest rates is a bullish scenario for gold because it pushes real yields further into the negative. Negative real yields eliminate the opportunity cost for holding the metal instead of bonds as a long-term store of value and safe-haven asset.

Stocks, the dollar and bond yields all searched for direction, slipping from minor losses to minor gains after the Fed minutes.

The US trade deficit jumped nearly 5% to record high above $71 billion in February, as accelerating vaccinations and stimulus money fueled a quicker recovery at home than abroad.

The other precious metals were mixed, with silver edging up less than 0.1% while platinum and palladium dropped 0.7% and 2.6%, respectively.

At the Comex close: June gold dipped $1.40 to $1,741.60; May silver added 2 cents, to $25.25; July platinum dropped $8.60 to $1,231.90; and June palladium fell $69.10 to $2,621.10 an ounce.

4/6/2021: Gold gains for fourth session

Source: Bill Musgrave, American Gold Exchange

Austin — Gold gained 0.8% to close at $1,743 as yields and the dollar retreated further, boosting the allure of alternative stores of value. It was the metal's fourth straight winning session.

The IMF raised its global economic projection to 6% this year, with the US growing at 6.4% as vaccine rollouts accelerate and more businesses reopen and hire. While the outlook remains uncertain because of the pandemic, accommodative monetary policies from global central banks, especially the Fed, figure heavily in the IMF forecasts.

Yields on US Treasury notes receded again, with the benchmark 10-year yield dropping below 1.7%, as bond traders continue to back away from expectations that the Fed will raise interest rates ahead of schedule because of inflation. Fed members have been aggressive recently in reassuring the markets that interest rates will stay near-zero through 2023.

Falling treasury yields support gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset and long-term store of value. The speculative run-up in yields last quarter was a primary driver behind the correction in gold prices.

The dollar fell with yields, losing 0.3% to hit a two-week low against major rivals. A weaker dollar supports gold and other commodities priced in it for global trade by decreasing their cost in other currencies, lifting overseas demand.

The other precious metals were also higher, with silver jumping 1.8% while platinum and palladium added 2.5% and 1.3%, respectively.

At the Comex close: June gold gained $14.20 to $1,743; May silver jumped 45 cents to $25.23; July platinum climbed $30.70 to $1,240.50; and June palladium added $35.50 to $2,690.20 an ounce.

4/5/2021: Gold edges up as yields, dollar slip

Source: Bill Musgrave, American Gold Exchange

Austin — Gold edged up slightly to close near $1,729 as Treasury yields and the dollar pulled back despite upbeat US economic data and sharply higher equities, lifting alternative stores of value. It was the metal's third straight winning session.

The US services sector accelerated at the fastest pace in 40 years in March, with the ISM non-manufacturing index hitting a record high near 64. Service industries comprise two-thirds of the US economy. Every category posted growth, with the strongest gains coming in restaurants, hospitality, and travel.

Coming after stellar recent reports on jobs, manufacturing, and consumer confidence, the services data signal an economy on the rebound behind accelerating vaccinations and stimulus support.

Wall Street cheered the news, with the Dow and S&P 500 jumping 1.1% and 1.4% respectively, to new record highs. The tech-heavy Nasdaq was even hotter, adding 1.6%

Despite the sharp rise in risk sentiment, Treasury yields retreated as traders reconsidered their recent bets that rising inflationary pressures will cause the Fed to accelerate rates hikes. Falling yields support gold by decreasing the opportunity cost for holding it instead of bonds and a safe-haven asset.

While the flood of stimulus money from President Biden's $1.9 trillion aid package and ongoing quantitative easing are likely to stoke inflation along with economic growth, the Fed has remained steadfast in pledging no rate hikes through 2023 even if inflation charges above its 2% target.

The dollar slipped with yields, further supporting gold by making it less expensive overseas.

Sharply lower oil prices limited gold's rise, with WTI crude tumbling more than 5% on OPEC production hikes. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were mixed, with silver and palladium sliding 0.7% and less than 0.1%, respectively, while platinum added 0.1%.

At the Comex close: June gold edged up 40 cents to $1,728.80; May silver dropped 17 cents to $24.78; July platinum picked up $1.20 to $1,209.80; and June palladium dipped $1.10 to $2,654.70 an ounce.