Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold rose 0.2% to close near $1,333, recouping Friday's loss, as soft data pressured bond yields and the dollar, boosting demand for alternative stores of value.

The Chicago Fed index of national economic activity slipped in January, and December was revised lower, as a slowdown in manufacturing clouded the growth outlook. The slide corresponds to a drop in the ISM index for new factory orders for the period. Separately, sales of new homes plunged nearly 8% in January.

Yields on benchmark 10-Year Treasury notes fell further, extending Friday's drop after a report to Congress by the Fed signaled no plans to raise interest rates four times this year. Yields had rallied earlier in the week following the release of hawkish minutes from the January meeting of the FOMC, which cited rising inflationary pressure, leading traders to speculate that rates could rise more aggressively.

Congressional testimony from new Fed Chief Jerome Powell later this week should give clearer guidance on rates.

The dollar edged lower, dropping 0.2% against major rivals, on the easing Fed outlook and slipping yields. A weaker dollar supports gold and other commodities priced in it for global trade by making them less expensive overseas.

Also helping gold, oil prices rose 0.5% to nearly a three-week high on strong US demand and reports that Saudi Arabia will continue to curb production in line with OPEC's recent agreement. Gold often trades in sympathy with oil as a hedge against energy inflation.

The other precious metals were also higher, with silver rising 0.4% while platinum and palladium climbed 0.3% and 1.3%, respectively.

At the Comex close: April gold gained $2.50 to $1,332.80; May silver rose 7 cents to $16.55; April platinum added $3, to $1,001.80; and June palladium climbed $13.45 to $1,054.60 an ounce.