Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold dipped 0.2% to close under $1,321, surrendering Friday's gains despite a weaker dollar, as traders hedged positions ahead of tomorrow's release of the government's Consumer Price Index report.

The dollar fell 0.2%, extending Friday's weakness, as traders concluded that weak wage growth will prevent the Fed from raising interest more than three times in 2018. Friday's release of the February US nonfarm payrolls report showed outstanding job-creation, with 313,00 new jobs added, but paltry wage growth, with the year-over-year increase in earnings falling from 2.8% to 2.6%.

Relative strength in the economy and labor markets had raised speculation that a fourth hike might be forthcoming late this year to prevent a sharp increase in inflation. Aggressively higher rates would support the dollar by attracting foreign exchange investment seeking higher yield.

Tomorrow's release of consumer price data should provide another clue about the Fed's possible path. A sharply higher CPI could offset weak wage growth in portending future inflation, putting a fourth hike back on the table.

The Federal budget posted a $215 billion deficit in February, up 12% year-over-year, as falling revenue from the newly-passed tax cuts combined with higher spending on hurricane disaster relief and the military. Payments on the expanding national debt also rose 9%. Deficits are projected to increase in the future because of the recent tax and budget deals.

Th other precious metals were also lower, with silver dropping 0.4% while platinum and palladium lost 0.1% and 2%, respectively.

At the Comex close: April gold dipped $3.20 to $1,320.80; May silver dropped 7 cents to $16.54; April platinum edged down $1.30 to $962.90; and June palladium lost $19.20 to $967.65 an ounce.