Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold fell 0.4% to close under $2,015 after December’s CPI came in slightly hotter than expected, lifting the dollar while pressuring alternative assets.

Consumer prices rose 0.3% last month, driving up the annual inflation rate to 3.4% from 3.2% in November, a bit above the forecast 3.3%. Rent and healthcare were the primary drivers of higher cost. The annual core rate, excluding food and energy, rose to 3.9%.

Separately, first-time jobless claims fell last week to the lowest level in three months, signaling ongoing health in the labor market.

Cleveland Fed President Loretta Mester quickly responded to the data, saying it shows the Fed “has more work to do” and that “March is probably too early” to begin reducing interest rates.

But the market apparently disagrees. Fed funds futures traders raised their bets on a March rate cut after the data, slightly increasing the odds of a quarter-point decrease to 65% from 64% before the CPI print.

What’s more, benchmark 10-year Treasury yields, which typically rise with higher interest rates, fell under 4% after the data.

The dollar initially rose 0.2% against major rivals, pressuring gold by making it pricier overseas. But the buck gave back almost all those gains late in the day after gold trading closed.

The other precious metals were also lower, with silver sliding 1.5% while platinum and palladium lost 1.1% and 1.2%, respectively.

At the New York spot close: gold slipped 7.40 to $2,014.30; silver dropped 35 cents to $22.54; platinum shed $10 to $19.60; and palladium declined $12.20 to $83 an ounce.