Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold picked up 0.1% to close above $1,835 as upbeat US data and sharply higher oil prices pressured the dollar and lifted demand for alternative stores of value. Silver gained 1.8% to $26.89, recouping some momentum from the recent Reddit-fueled buying frenzy.

The US service sector expanded in January, with the ISM index rising to a two-year high, as non-manufacturing companies rebounded and added employees despite the ongoing pandemic. Service industries comprise around 77% of GDP.

ADP reported private payrolls added 174,000 jobs in January after shedding a revised 78,000 in December. Most of the gains came in services.

Wall Street climbed modestly on the upbeat data, with all three major US indexes adding around 0.3%.

Treasury yields also rose as traders speculate that the additional fiscal stimulus and other spending from a Democrat-controlled government will fuel economic growth and higher inflation. Higher yields create short-term headwinds for gold by increasing the opportunity cost for holding the metal instead of bonds.

Oil prices surged, with WTI climbing 1.7% to a one-year high on growth prospects and data showing US stockpiles fell to the lowest level since last March. Also lifting prices, OPEC+ producers signaled that they will production cuts that will reduce global stockpiles below the five-year average by June. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The dollar slipped on the stronger data, buoying gold and other commodities priced in it for global trade.

The other precious metals were sharply higher, with platinum rising 1.7% while palladium added 2.2%.

At the Comex close: April gold added $1.70 to $1,835.10; March silver picked up 49 cents to $26.89; April platinum climbed $18.50 to $1,114.50; and March palladium rallied $48.90 to $2,276.60 an ounce.