Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold edged up 0.2% to close near $2,024 as investors tread water ahead of next week's FOMC meeting and slew of important US economic data releases later this week.

The Fed is almost certain to leave interest rates unchanged. But investors anxiously await the accompanying policy statement for clues about when rate cuts will begin.

Upbeat recent data and a series of hawkish comments from Fed officials have dimmed the prospect for a March pivot, leaving traders in limbo. Fed fund futures currently put the odds of a quarter-point March cut at 46%, down from around 80% two weeks ago. The likelihood of no change at the current meeting stands at more than 97%.

Data to be released this week should also help clarify when and by how much interest rates may fall. The flash PMI report is coming tomorrow, the Q4 GDP estimate on Thursday, and the PCE index on Friday. The Fed’s preferred gauge of inflation, the PCE print will carry the most weight in determining the course of rate policy in the short term.

Gold was supported financial uncertainty in Asia after major stock indexes in China and Hong Kong plunged to multi-year lows in recent days as global investors lost faith that the government can revive the flagging economy.

The developing conflict between the US and Iran-caked Houthi militants is also supporting the metal after another round of missiles struck US military bases in Iraq yesterday.

Capping gold’s gains, benchmark 10-year Treasury yields edged up slightly and the dollar added 0.2% against major rivals. Higher yields increase the opportunity costs for holding gold instead of bonds; a rising dollar makes it more expensive in the other currencies, limiting overseas demand.

The other precious metals were also higher, with silver rising 0.8% while platinum and palladium climbed 0.3% and 0.7%, respectively.

At the New Yok spot close: gold gained $3.90 to $,023.70; silver rose 17 cents to $22.35; platinum picked up $2.50 to $905.50; and palladium advanced ^.30 to $946.80 an ounce.