Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.4% to close above $1,796 despite a rebound in stacks as the dollar fell sharply and bargain-hunters swept in after last week's 2.5% decline. The metal still lost 1.8% for the month, under pressure from a hawkish Federal Reserve.

The dollar fell 0.7%, its biggest daily drop in more than two months, on expectations that other major currencies such as the Australian dollar and UK pound are likely to tighten along with the Fed, thereby reducing the dollar's yields advantage in Forex markets.

The dollar hit an 18-month high on Friday as currency traders priced in the Fed's clear signals, following its meeting on policy last week, that it will begin raising interest rates in March. Fed fund futures anticipate five or more quarter-point hikes this year.

But a chorus of Fed officials calmed the markets today, suggesting that no roadmap is in place for additional hikes after March. Mary Daly of the San Francisco Fed said the central bank will want to see economic data before deciding on additional tightening.

Separately, Richmond Fed President Thomas Barkin said the pace after March depends on inflation, and the Atlanta Fed's Raphael Bostic emphasized that the Fed is "not set on any particular trajectory."

Wall Street rebounded sharply after last week's Fed-driven selloff, with the Dow and S&P 500 adding 1.2% and 1.9%, respectively, while the tech-Heavy Nasdaq surged 3.4%. High flying tech stocks are more sensitive to rate hikes because their valuations are based on future growth and cash flow, which are eroded by higher interest rates.

The other precious metals were mixed for the day and month. Silver rose 0.4% today but lost 4.1% this month. Platinum added 1.4% for a monthly gain of 5.7%. Palladium slid 0.8% today but still jumped 23% in January behind worries that an invasion by Russia of Ukraine would disrupt supplies.

At the Comex close: April gold gained $9.80 to $1,796.40; March rose 9 cents to $22.39; April platinum picked up $14.20 to $1,020.80; and March palladium dropped $19.50 to $2,355.80 an ounce.