Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gold gained 1.4% to close above $1,181, its highest finish since late November, as growing uncertainty about the pace of rate hikes caused the dollar to sell off, boosting demand for alternative stores of value. The metal has rallied nearly 3% in the New Year.

The dollar plunged as much as 1.3% against major rivals, dropping to a one-month, after yesterday's release of minutes from the Fed's December meeting emphasized "considerable uncertainty" about future changes to monetary policy.

The central bank raised interest rates by a quarter-point last month and signaled at least two hikes likely in 2017, helping the buck rise to a 14-year high. Expectations that president-elect Donald Trump's fiscal policies will stoke growth and inflation also supported the currency. The minutes, while containing no real surprised, suggested that the incoming Trump administration could introduce "a number of risks that, if realized, might call for a different path of policy than the currently expected."

The dollar was further pressured by disappointing jobs data from the ADP. Private payrolls added just 153,000 jobs last month, far fewer than November's revised 215,000. The average pace of hiring for 2016 was 174,000 per month, well short of 2015's average of 209,000. A weaker dollar supports gold and other commodities by making them less expensive overseas.

Rising oil prices also supported gold, as crude rebounded 0.5% to $53.55 per barrel on news that Saudi Arabia cut production to meet OPEC's new agreement. Gold often trades in sympathy with oil ass a hedge against energy-related inflation.

The other precious metals were mostly higher, with silver and platinum picking up 0.5% and 3%, respectively, while palladium dipped 0.1%,.

At the Comex close: February gold gained $16 to $1,181.30; March silver added 9 cents, to $16.64; April platinum jumped $28.80 to $976; and March palladium dipped 60 cents to $738.20 an ounce.