Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinRebounding from two down sessions, gold gained 0.9% to close near $1,924 despite more hawkish Fed talk as downbeat US data pressured yields and the dollar, driving demand for alternative assets. It was the metal's highest finish since late April 2022.

The Philly Fed gauge of regional business activity edged slightly higher in January but remained mired in negative territory for the fifth straight month, adding to concerns about recession in manufacturing. Earlier this week, New York's Empire State survey also fell deeply into the negative. Both readings are widely followed as weathervanes for national factory activity.

National housing starts fell 1.4% in December as higher mortgage rates and a slowing economy continues to slam the beaks on new home construction. Following November's 1.8% decline, housing starts were at the lowest level since last July.

Benchmark 10-year Treasury yields fell further under 3.4% as investors, worried about recession, flock to the perceived safety of government debt. Falling yields lift gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

More hawkish comments from Fed officials helped fuel concerns that the central bank will overdo and push the economy into recession. Susan Collins, president of the Boston Fed, said rates must exceed 5% and stay there to force inflation back to 2%. Fed Vice Chair Lael Brainard, typically a dovish voice, reinforced the strategy of keeping rates restrictive "for some time."

The dollar retreated 0.3% on the weak data and recession worries, supporting gold and other commodities by making them less expensive in other currencies.

The other precious metals were mostly higher, with silver and palladium rising 0.9% and 3.7%, respectively, while platinum dipped 0.3%.

At the Comex close: February gold gained $16.90 to $1,923.90; March silver picked up 22 cents to $23.87; April platinum dipped $2.60 to $1,041.10; and March palladium climbed $62.50 to $1,768.50 an ounce.