Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold fell 1.3% to close at $1,799 as rising risk appetite prompted a spike in bond yields, undercutting demand for alternative stores of value. It was the metal's first finish under the psychologically important $1,800 level in more than a week.

The rollout of vaccines and progress toward a new $1.9 trillion pandemic relief package lifted the Dow by 0.3% to a new all-time high as investors, optimistic about recovery, shifted out of safe havens like gold and bonds toward riskier assets.

Further supporting risk sentiment, the New York Fed's Empire State manufacturing index rose in February to a seven-month high, signaling new momentum in this leading-edge sector of the economy. And St Louis Fed President James Bullard said today that financial conditions are "generally good" and inflationary pressures are likely to increase as the economy gets traction.

Treasury prices fell, lifting benchmark 10-year yields to the highest level in more than a year. Rising inflation expectations drive higher bond yields as investors demand greater return for tying up cash that will increasingly lose spending power over time.

Rising yields pressure gold in the short term by increasing the opportunity cost for holding the metal instead of bonds. But higher inflation expectations also support it in the longer term by increasing demand for the metal as a long-term store of value.

The other precious metals were mixed, with silver finishing virtually flat while platinum and palladium added 1.6% and 0.2%, respectively.

At the Comex close: April gold lost $24.20 to $1,799; March delivery sliver was unchanged at $27.33; April platinum climbed $20.60 to $1,279.60; and March palladium added $5.60, to $2,388.20 an ounce.