Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slid 0.7% to close at $1,930 as upbeat GDP data lifted yields and the dollar, prompting traders to take profits from the metal's five-day rally to a new nine-month high above $1,942.

The US economy grew at an annualized 2.9% in Q4, beating expectations, fueled by solid consumer spending, which rose at a 2.1% clip. Household outlays account for around 70% of all US economic activity.

While the economy showed resilience last quarter, it was helped by unsustainable circumstances. A large increase in inventories, or unsold goods, accounted for are half the GDP growth. Businesses are likely to decrease production in 2023 because of high existing inventory. And falling international trade deficits further padding GDP in the quarter.

S&P Global, one of the top economic forecasters on Wall Street, projects GDP will decline 1.9% during Q1, saying the economy is on a "downward trajectory." The National Association for Business Economics reported earlier this week that 52% of economists surveyed believe the US will enter a recession this year.

Still, benchmark 10-year Treasury yields edged slightly higher to nearly 3.5% on hopes that a recession may be avoided. Rising yields weigh on gold by increasing the opportunity cost for holding it instead of bonds as a safe haven asset.

The dollar tracked higher with yields, adding 0.2% against major rivals, as the solid GDP perhaps gives the Fed latitude to keep interest rates elevated for longer. A stronger dollar is s headwind for gold and other commodities because it makes them pricier in other currencies.

The other precious metals were mixed. Silver added 0.3% while platinum dropped 2.2% and palladium lost 1.4%.

At the Comex close: February gold slipped $12.60 to $1,930; March silver rose 8 cents to $24.02; April platinum dropped $23.10 to $1,023; and March palladium fell $24.10 to $1,663.80 an ounce.