Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gold gained for a second session, rising 0.2% to close at a two-week high of $1,141, as retreating equities boosted demand for alternative assets.

The Dow fell 0.5% and the S&P 500 lost 0.75% as traders took profits from three straight days of gains. Early in the session, the Dow traded within 20 points of 20,000, a level it has never breached, before falling back. Equities have risen strongly since Donald Trump's election, with both indexes achieving all-time highs on expectations that lower taxes and regulations in the Trump administration will boost growth and corporate earnings.

For a second session, gold's gains came despite a rising dollar, which picked up another 0.4% against major rivals. The buck has gained more than 5% since November 8, nearing a 14-year high, on speculation that Trump's policies will be inflationary, and spur the Fed to accelerate the pace of rate hikes next year. Higher rates attract foreign exchange investment seeking higher yields, bidding up the buck at the expense of lower-yielding currencies. In turn, a rising dollar weighs on gold and other commodities denominated in it for international trade by making them more expensive overseas.

Rising interest rates are beginning to affect the housing market as mortgage rates rise. U.S. home sales fell 2.5% last month to the lowest level in nearly a year, according to the National Association of Realtors.

The other precious metals were mixed, with silver picking up 0.3% while platinum and palladium, more directly ties to industry, fell 0.5% an 1.1%, respectively.

At the Comex close: February gold gained $2.00 to $1,141; March silver added 5 cents, to $16.04; January platinum dropped $4.10 to $900.00; and March palladium lost $7.55 to $666.25 an ounce.