Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold dipped 0.2% to hold above $1,823 as prospects for added stimulus sparked inflation expectations, lifting bond yields and weighing on alternative stores of value. The metal still gained 0.6% for the week on rising demand for inflation hedges.

At a virtual meeting today with G-7 finance ministers and central bankers, Treasury Secretary Janet Yellen urged additional fiscal support to promote a lasting global recovery from COVID recession. The former Fed Chair emphasized that "the time to go big is now," and the risk of doing too little far outweighs the risk of doing too much.

Yellen's comments echoed those of current Fed Chair Jerome Powell, who earlier in the week pledged to sustain current levels of quantitative easing at least until 2022 while holding interest rates near zero.

President Joe Biden pushed forward with another $1.9 trillion in stimulus spending, inviting a group of mayors and governors to the White House to gauge damage to city and state economies and gather support for his bill.

Combined with $4 trillion already spent on pandemic relief and unprecedented monetary stimulus from the Fed, the additional spending has sparked inflation concerns among bond traders, driving yields on benchmark 10-year Treasurys to the highest level in a year today. Rising yields tend to weigh on gold by increasing the opportunity cost for holding the meal, which offers no yield.

Consumer sentiment fell more than expected in February, according to the University of Michigan index, touching a six-month low. Families earning less than $75,000 a year were especially pessimistic that the economy would improve within the next six months.

The UK recorded its worst economic tumble in 300 years in 2020, according to official data released today, with GDP contracting nearly 10%. Germany, the eurozone's biggest economy, fell 5% while France and Italy dropped 8.3% and 8.8%.

The other precious metals were higher. Silver rose 1% for the day and week. Platinum added another 1% for a weekly surge of 11% on supply deficit forecasts for 2021. Palladium rose 1.5% today and 2.5% this week.

At the Comex close: April gold slipped $3.60 to $1,823.20; March silver climbed 28 cents to $27.33; April platinum added $12, to $1,259; and March palladium picked up $35.60 to $2,382.60 an ounce.