Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slipped 0.3% but held above $1,804 after hawkish signals from global central banks lifted Treasury yields and prompted traders to take profits from the metal's three-day rally.

The Bank of England raised interest rates for the second time in as many meetings as policymakers try to head off rising inflation. The European Central Bank also acknowledged that inflation was running higher than expected and left the door open rate hikes this spring.

The increasingly hawkish lean of central bankers overseas reinforced the view among US investors that the Fed will begin tightening monetary policy in March. Benchmark 10-year Treasury yields jumped up to 1.84%, the highest in a week. Rising yields pressure gold by increasing the opportunity cost for holding it instead of bonds.

Stemming gold's decline, the dollar fell 0.3% against major rivals on the prospect that rate hikes in the UK and EU will minimize the rate differential with the US, making the dollar relatively less attractive. A weaker dollar lifts gold and other commodities by making them cheap in other currencies.

Gold was further backstopped by sharply lower US equities. The Dow fell 1.5% while the S&P 500 lost 2.4% and the Nasdaq plunged 3.7%.

The other precious metals were also lower, with silver dropping 1.5% while platinum and palladium fell 1.3% and 2.2%, respectively.

At the Comex close: April gold slipped $6.20 to settle at $1,804.10; March silver lost 33 cents to $22.38; April platinum shed $13.40 to $1,030.30 an ounce and March palladium dropped $51.80 to $2,317.70 an ounce.