Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gold dipped 0.2% to close above $1,239, holding near yesterday's three-month high of $1,242, as a rebounding dollar offset retreating equities to reduce demand for alternative stores of value. The metal gained for the third straight week, adding 0.3% since last Friday.

The Dow dropped 0.2% as traders took profits from record highs while awaiting details on President Donald Trump's tax and trade policies. Stocks have rallied on expectations that he will boost growth by slashing taxes, rewriting trade agreements, and spending $1 trillion to rebuild U.S. infrastructure.

The dollar recouped this week's losses, adding 0.4% against major rivals on follow through from Janet Yellen's testimony before Congress this week. While the Fed Chair defended her go-slow approach to rate hikes, she affirmed that the economy is on track for gradual tightening in monetary policy this year.

In December, the Fed signaled three increases of a quarter-point each for 2017. The Fed funds futures market projects only two, with less than a 20% chance of the first coming in March.

Higher rates boost the dollar by attracting foreign exchange investment seeking higher yield. In turn, higher rates can pressure gold and other commodities denominated in the dollar for international trade by making them more expensive in other currencies.

The other precious metals were down for the day and mixed for the week. Silver dipped 0.2% today but gained 0.5% this week. Platinum dropped 1% for a weekly loss of 0.6%, while palladium fell 1.8% today and 0.5% this week.

At the Comex close: April gold dipped $2.50 to $1,239.10; March silver slid 4 cents to $18.03; April platinum fell $9.70 to $1,006; and March palladium shed $14.10 to $779.20 an ounce.