Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.3% to close near $1,885 after relatively dovish comments from Fed Chair Jerome Powell undercut the dollar, boosting demand for alternative stores of value. Sharply higher oil prices also lifted the metal.

Speaking at the Economic Club of Washington, Powell doubled down on his statement from last week that the "process of disinflation" in underway. While admitting that the strong labor market indicates further rate hikes are needed, he also said "significant declines" in inflation are expected this year.

Analysts were widely anticipating that Powell would use this speech to shift toward a more aggressive posture after last Friday's blowout nonfarm payrolls report, which showed the economy adding 517,000 jobs in January and the unemployment rate falling to a 53-year low.

The fact that he repeated his somewhat dovish outlook about inflation was cause for a significant relief rally. All three major US stock indexes rallied after Powell's speech, with the Dow and S&P 500 adding 0.8% and 1.3%, respectively, while the tech-heavy Nasdaq jumped nearly 2%.

The dollar dropped 0.3% against major rivals, lifting gold by making it cheaper in other currencies. The buck had rallied to a one-month high in recent sessions on expectations that the Fed would become more hawkish after the jobs data.

US benchmark WTI crude jumped 4.1% on hopes of increased demand from China and supply issue in the Middle east after the devastating earthquake in Turkey. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were mostly higher. Platinum and palladium rose 1.2% and 3.9%, respectively, while silver slipped 0.3%.

At the Comex close: April gold gained $5.30 to $1,884.80; March silver slipped 6 cents to $22.18; April platinum picked up $11.60 to $986.20; and March palladium advanced $62.10 to $1,641.50 an ounce.