Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.5% to close above $1,327 as modest consumer inflation reduced pressure on the Fed to accelerate rate hikes, eroding the dollar and boosting demand for alternative assets.

The Consumer Price Index rose 0.2% in February, well-under January's 0.5% jump, and edged up from 2.1% to 2.2% for the prior 12 months. The core CPI, stripping out volatile food and energy costs, also rose 0.2% but held unchanged at 1.8% for 12 months. More closely monitored by the Fed, the core CPI remains stubbornly under the 2% target.

The dollar fell 0.3% as traders speculated that the soft inflation data will make the Fed less likely to raise interest rates four times this year. A falling dollar supports gold and other commodities by making them less expensive overseas.

Prior to last week's nonfarm payrolls report, which showed weak wage growth despite strong job growth, the central bank seemed inclined accelerate monetary tightening to a fourth hike in 2018, one more than their published plan. With wages and inflation muted in February, that prospect seems less probable now.

Gold extended its gains after President Trump fired Secretary of State Rex Tillerson, replacing him with CIA Director Mike Pompeo. The churn of high-level personnel in the Trump Administration has added to political uncertainty in recent months, underpinning demand for safe-haven assets.

The other precious metals also finished higher, with silver rising 0.6% while platinum and palladium rose 0.5% and 2.5%, respectively.

At the Comex close: April gold gained $6.30 to $1,327.10; May silver added 9 cents, to $16.63; April platinum climbed $4.40 to $967.30; and June palladium jumped $33.95 to $991.60 an ounce.