Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold added 0.2% to close near a nine-month high $1,928 as recession worries offset more tough talk from the Fed to boost demand for safe havens. The metal ended the week 0.3% higher for its fifth straight weekly win.

The National Association of Realtors said existing home sales plunged to a 12-year low in December and the median home price rose at its slowest pace since the depths of the pandemic in 2020.

Following reports earlier this week that new housing starts have fallen sharply for two months, the NAR data was seen as further evidence that the once-blazing housing market has fallen into recession.

Continued weakness in the manufacturing sector, a bigger-than-expected tumble in retail sales, and dismal housing data have investors worried that the Fed will push the economy into a tailspin as it attempts to smother inflation with higher interest rates.

Hawkish commentary from yet another Fed official reinforced those concerns. Kansas City Fed President Esther George said today that it's too soon to say inflation is on "the right trend" and more tightening is needed.

George's statements echo similar ones this week from the Boston Fed's Susan Collins, Fed Vice Chair Lael Brainard, James Bullard of the St. Louis Fed, and Cleveland's Loretta Mester.

Benchmark 10-year Treasury yields bucked their recent slide, edging back up toward 3.5% and capping gold's gains by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset. The dollar was little changed, inching down very slightly against major rivals.

The gold price was further buoyed by rising oil prices. US benchmark WTI crude added 1.2% for the day and 1.8% for the week on the prospects of increasing demand from China as zero-Covid policies are relaxed. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were mixed for the day and lower for the week. Silver added 0.3% today but fell 1.8% this week. Platinum picked up 0.6% but still fell 2.3% for the week. Palladium dropped 2.6% for a weekly loss of 3.6%.

At the Comex close: February gold gained $4.30 to $1,928.20; March silver added 7 cents, to $23.94; April platinum climbed $6.70 to $1,047.80; and March palladium shed $45.30 to $1,723.20 an ounce.