Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gold edged 0.1% higher in choppy trade to close at $1,185.50, a fresh six-week high, as the dollar swung from mild losses to shallow gains ahead of tomorrow's first press conference from Donald Trump. The metal reached as high as $1,190 in intraday before sliding back.

Stocks and the dollar have rallied steadily since November, with the Dow setting records while the buck hit a 14-year high, on speculation Trump's campaign promises to boost infrastructure spending while slashing taxes and regulations will accelerate both growth and inflation. In his first post-election press, the President-elect is expected to provide some clarity on how�or whether�he plans to make good on those promises.

Speculators are cutting their bullish bets on the dollar, signaling that the Trump-fuel rally may have peaked. Analyst cite three reasons for a lower buck in coming months. Economic conditions in the Eurozone are perking up, which should lead to a stronger euro. China strengthened the yuan by 1% last week, drawing more capital investment in Asia. And Trump's plan to rescue U.S. manufacturing will be harmed by a stronger dollar by making U.S. exports less price-competitive.

Conflicting signals from prominent Fed members also caused the dollar and gold to waffle. Boston Fed President Eric Rosengren said yesterday that conditions likely to warrant "a gradual but somewhat more regular" rise in interest rates this year. Dennis Lockhart of the Atlanta Fed was more measured, warning that growth beyond 2% is unlikely next year, and investors who expect "a breakout to markedly higher growth" are likely to be disappointed.

The other precious metals also finished higher, with silver and palladium gaining 1% and 1.1%, respectively, while platinum added less than 0.1%.

At the Comex close: February gold rose 60 cents to $1,185.50; March silver gained 17 cents to $16.85; April platinum added 20 cents, to $982.80; and March palladium climbed $8.10 to $765.25 an ounce.