Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.2% to close above $1,298 as rising Brexit risk and mixed US data lifted demand for safe havens despite rallying equities and a stronger dollar. The metal finished the first quarter 1.2% higher, though it slipped 1.4% in March.

Parliament rejected PM Teresa May's Brexit plan for a third time today, strongly increasing the odds of a so-called "hard Brexit," in which the UK crashes out of the EU with no trade agreements in place. Considered the worst-case scenario for both Britain and the EU, a hard Brexit would create chaos in financial markets and damage both nations' currencies. Lawmakers have two weeks to come up with a new plan.

The dollar edged up 0.1% against major rivals as the UK pound fell to a six-week low. The buck has benefited from rising Brexit risk, rebounding 1.1% this quarter as Forex traders depart the pound and euro.

While gold has also benefited from Brexit uncertainty, the dollar's rise has effectively capped gold's gains by making it more expensive overseas. Still, a hard Brexit is projected to be strongly bullish for the metal in its role as currency of last resort during economic turmoil.

Consumer spending was weak January, according to government data, contributing to the sluggish pace of real GDP growth in Q1, currently estimated at 1.7% by the Atlanta Fed. In addition, the PCE inflation index fell for the first time in almost two years, pushing the Fed's preferred measure down to 1.4% for the prior 12 months, well shy of its 2% target.

On the plus-side of the ledger, consumer sentiment picked up in March, according the University of Michigan index. New-home sales jumped to an 11 -month high in February, while mortgage rates fell by the most in a decade.

Shaking off Brexit fears, the Dow rose 0.6% on optimism that the US and China will come to a trade agreement, ending the tariff war that has been a drag on both economies. Both sides reported "constructive" talks in Beijing this week, with negotiations continuing next week in Washington.

The other precious metals were also higher, with silver adding 0.9% while platinum and palladium rose 1.2% and 2.5%, respectively.

At the Comex close: June gold gained $3.20 to $1,298.50; May silver rose 14 cents to $15.11; July platinum picked up $10.30 to $854.10; and June palladium climbed $32.10 to $1,341.80 an ounce.