Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold edged up less than 0.1% to close above $2,035 despite rising equities as the dollar declined for a second session, lifting alternative stores of value.

Global equities rallied to a two-year high and the S&P 500 climbed 0.8% to a new record after upbeat earnings reports stoked risk appetite, offsetting worries about US regional banking and instability in China’s stock markets. The Dow added 0.4% and the Nasdaq 1%, limiting gold’s gains.

Moody’s downgraded New York Community Bancorp to junk status because of problems with funding and liquidity, raising new concerns about the regional banking sector. Meanwhile, China added new restrictions short selling in its stock markets, boosting Chinese blue chips.

The dollar fell 0.2% against major rivals as it pulled back for a second session from its rally to an 11-week high. Upbeat US data and hawkish Fed talk helped to rally the dollar earlier in the week, leaving it a little over-bought. A weaker buck lifts gold by making it cheaper overseas.

Benchmark 10-year Treasury yields were little changed as investors weigh the outlook for the Fed’s pivot to lower interest rates.

Two more Fed officials talked down the possibility of immediate rate cuts. Richmond Fed President Tom Barkin said his “forecast in uncertain” and recent reductions in inflation might be a “head fake.” Susan Collins of the Boston Fed said rate cuts might come “later in the year” but more certainty about inflation is needed.

Meanwhile, consumer borrowing screeched to a near halt in December, rising just 0.4% annualized after 5.7% in November. Americans are feeling the pinch of high rates. In an ominous sign for consumer spending going forward, credit card delinquencies hit the highest level in more than a decade, according to the New York Fed.

The other precious metals were also lower, with silver sliding 0.5% while platinum and palladium tumbled 2.6% and 5.4%, respectively.

At the New York spot close: gold added 70 cents, to $2,035.20; silver slid 12 cents to $22.76; platinum shed $24.10 to $886.90; and palladium retreated by $51.10 to $900.30 an ounce.