Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slid 0.9% to close above $1,340 as the dollar rallied behind rising Treasury yields and upbeat consumer spending data, reducing demand for alternative stores of value.

Consumer spending rose 0.4% to a six-year high in December, driven by optimism about low unemployment and record-high stock prices. But consumers tapped their savings to make purchases, with the savings rate falling to 2.4%, the lowest in 12 years.

Incomes rose 0.4% in December and 3.1% for all of 2017. But real incomes, or incomes net inflation, rose at just 1.2%, the weakest rise since 2005.

Inflation pressures remained muted, with the PCE index rising 0.1% in December and 1.8% for the year. The Fed's preferred measure, the so-called core PCE, which strips out fuel and food, rose 0.2% for the month and 1.5% for the year, well under the 2% target.

After falling 1.7% last week, the dollar recouped 0.4% against major rivals on the upbeat consumer data. Rising Treasury yields also supported the buck as traders expect the Fed to lay the groundwork for another rate hike when it meets this week. Higher rates help the dollar by making it more attractive to foreign exchange investors.

The other precious metals were also lower, with silver dropping 1.8% while platinum and palladium lost 0.6% and 0.2%, respectively.

At the Comex close: February gold fell $11.80 to $1,340.30; March silver lost 32 cents $17.13; April platinum slid $5.70 to $1,012.70; and March palladium dipped $1.65 to $1,083.40 an ounce.