Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold rose 0.8% to close at $1,954 as rising inflation and pessimism about Russia's war on Ukraine pressured equities and stoked demand for safe havens. The metal gained 2.8% for the month and 6.8% for the quarter, its best since 2020.

The Personal Consumption Expenditures index rose another 0.6% in February, lifting the 12-month inflation rate to 6.4%, the most since January 1982. The Fed's preferred gauge of inflation, the PCE is considered to be more accurate than the CPI, which rose an annualized 7.9% through February.

Separately, consumer spending rose a mild 0.2% during the same period, adding to worries about a slowing economy. Most of the increase was due to higher prices, since spending is calculated on total dollar outlays.

Wall Street fell sharply on the weak consumer data and hot inflation print, with all three major US indexes plunging 1.6% to notch the biggest quarterly declines in two years.

Benchmark 10-year Treasury yields slipped again on flights to safety, only days after the curve between 2-year and 10-year yields temporarily inverted. An inverted yield curve is often seen as a recession warning sign.

Faltering ceasefire talks between Russia and Ukraine added to risk-off sentiment. Russian forces stepped up their attacks on major cities despite promises to de-escalate, and Putin threatened to cut off Europe from natural gas unless it pays in rubles to prop up the failing currency.

Limiting gold's gains, the dollar added 0.6% today and 2.8% this quarter on resurgent safe-haven buying and expectations that the Fed will accelerate rate hikes to contain inflation. Higher rates lift the buck by attracting Forex money seeking yield, pressuring gold in turn by making it more expensive overseas.

Sharply lower oil prices also capped the metal's rise, with WTI dropping around 7% after President Biden said he will release 180 million barrels of crude from the strategic reserve to offset the supply deficit caused by Russian sanctions. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were mixed for the day and month but higher for the quarter. Silver added 0.1% today for a monthly increase of 3.2% and a quarterly rise of 7.6%. Platinum slid 0.5% today and 4.1% in March but added 3.1% this quarter. Palladium picked up 0.6% for the day and 18% for the quarter despite losing 9.9% this month.

At the Comex close: June gold gained $15 to $1,954; May silver edged up 2 cents to 25.13; July platinum dipped $5.40 to $995.80; and June palladium picked up $12.50 to $2,255.60 an ounce.