Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold futures slipped 0.5% to close under $2,084 as falling oil prices and upticks in yields and the dollar prompted traders to take profits from yesterday’s rise to a new high above $2,093.

US benchmark WTI crude fell 3% to under $72 per barrel as worries eased about Middle East supply disruptions. A growing number of major shipping companies, including Denmark’s Maersk and France’s CMA GGM, will resume routing cargo vessels through the Red Sea after suspending shipments because of Yemeni-Houthi rebel attacks earlier this month.

Gold often trades in sympathy with oil as a hedge against energy related inflation.

Benchmark 10-year Treasury yields rebound above 3.85% after the final 2023 auction of 7-year notes was weakly received. Yields had fallen to a five-month low under 3.8% earlier in the week on growing expectations of a Fed policy pivot to rate cuts in early 2024.

Rising yields weigh on gold by increasing the opportunity costs for holding it instead of bonds.

Tracking higher with yields, the dollar rose 0.3% against major rivals after dropping to a five-month low, pressuring gold and other commodities by making them more expensive in other currencies.

Gold’s slide was backstopped by a second week of rising first-time claims for unemployment benefits. Exceeding estimates, new claims rose by 12,000 to 218,000 last week.

Also supporting the metal, China’s gold imports from Hong Kong increase 37% in November versus October, signaling rising physical demand in the world’s biggest gold-buying nation.

The other precious metals were mostly lower, with silver and palladium falling 1.1% and 1.5%, respectively, while platinum picked up 0.8%.

At the Comex close: February gold slipped $9.60 to $2,083.50; March silver dropped 27 cents to $24.37; April platinum added $8.60, to $1,023.20; and March palladium shed $17,50 to $1,140.20 an ounce.