Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.8% to close near $2,019 despite small rises in yields and the dollar as escalating tensions in the Middle East spurred safe-haven demand.

Initial jobless claims fell 16,000 to a seasonally adjusted 187,000 last week, the lowest level in 17 months. Following yesterday’s unexpected strong retail sales print, the upbeat labor report helped to tamp down speculation about how soon the Fed will start cutting interest rates.

Several Fed officials have pushed back in recent days on market expectations for quick and deep cuts. Fed Governor Christopher Waller said earlier this week that reductions are likely this year, but the Fed will not be “rushed.” Atlanta Fed chief Raphael Bostic said he thinks Q3 for the first decrease unless he sees “convincing” evidence that inflation is falling more rapidly than expected.

Fed fund futures traders are now pricing in a 57% likelihood of a quarter-point cut in March, down from 70% last week.

Benchmark 10-year Treasury yields and the dollar both pushed higher on the solid data and hawkish Fed speak. Rising yields pressure gold by increasing the opportunity cost for holding it instead of bonds, while a stronger dollar makes it pricier in other currencies, limiting overseas demand.

But safe-haven inflows allowed gold to overcome these impediments today. The US launched new strikes against Houthi anti-ship missiles fired at the Red Sea, deepening concerns that the Israel/Gaza war will spread further into the region and draw in Iran.

The other precious metals were also higher, with silver rising 0.6% while platinum and palladium climbed 2.5% and 2.6%, respectively.

At the New York spot lose; gold gained $16 to $2,018.60; silver added 14 cents, to $22.70; platinum picked up $22.40 to $912; and palladium advanced $24.30 to $944 an ounce.