Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.5% to close above $1,814 despite rising equities and a stronger dollar as bargain-hunters stepped in after yesterday's 0.3% decline and Treasury yields edged lower.

All three major US stock indexes rose after upbeat data suggested that the omicron variant is unlikely to derail the US recovery. The Dow and S&P 500 set new intraday records before receding to small gains of 0.1% each. The tech heavy Nasdaq recovered from yesterday's slip by adding 0.5%.

First-time jobless claims fell below 200,000 last week, reassuring the markets that omicron is not adding to layoffs. New claims are hovering near a 52-year low while continuing claims fell 140,000 to pre-pandemic levels at 1.7 million.

The Chicago Fed region PMI rose above 63 in December, where any reading above 50 means expansion, indicating that manufacturing is strong despite stresses from the new covid strain. The last regional index before national ISM data is released next week, the Chicago PMI is considered a weathervane for overall US manufacturing.

Benchmark 10-year Treasury yields pulled back slightly to 1.52% as traders square year-end books and hedge against record-high stocks. Falling yields help gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Gold continues to gather support despite rising risk appetite because of lingering pandemic worries and the highest inflation in decades. The metal is often sought as a currency of last resort and hedge against loss of purchasing power.

Limiting gold's gains, the dollar added 0.1% against major rivals in thin holiday trading. A stronger dollar creates headwinds for gold by making it pricier in other currencies.

The other precious metals were mixed, with silver adding 0.9% while platinum and palladium fell 0.6% and 0.2%, respectively.

At the Comex close: February gold rose $8.30 to $1,814.10; March silver picked up 20 cents to $23.06; April platinum dropped $5.40 to $964.60; and March delivery slipped $3.80 to $1,983.20 an ounce.