Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold slipped 0.5% to close at $2,856 as slight upticks in Treasury yields and the dollar prompted traders to take profits from bullion’s aggressive rise to new record highs over the past three sessions. Silver dropped 1% to finish at $32.52 an ounce.

With the markets preparing for tomorrow’s release of the government’s important nonfarm payrolls report, traders consolidated their positions by shifting modestly out of overbought Treasurys and into oversold dollars. If payrolls strengthened markedly in January, the Fed may delay rate cuts for longer, boosting both yields and the buck.

Perhaps adding to the Fed’s ability to hold rates unchanged, Treasury Secretary Scott Bessett said today that the Donal Trump is no longer focused on pressuring the Fed to cut rates but rather hopes to force down yields to lower borrowing costs.

Benchmark 10-year Treasury yields edged up slightly, weighing on gold by increasing the opportunity cost for holding it instead of bonds for safety.

The dollar picked up 0.1% against major rivals after the Bank of England cut interest rates and delivered a dovish message on monetary policy, weakening the pound. A rising dollar is a headwind for gold and other commodities because it makes them more expensive in other currencies, impeding overseas demand.

Platinum was flat while palladium fell 1.8%.

At the New York spot close: gold dipped $15.60 to $2,856; silver shed 34 cents to $32.52; platinum was virtually unchanged; and palladium dropped $17.20 to $983 an ounce.