Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.2% to close above $2,051 as another spate of weak US economic data reinforced bets that the Fed will start cutting interest rates in March, weakening the dollar while lifting alternative stores of value.

US GDP in the third quarter was revised down to 4.9% from 5.2%, the government reported, behind substantially softer consumer spending than initially estimated. Comprising some 70% of the economy, spending grew at 3.1% rather than the 4% originally thought. GDP growth is projected to slow to 1% to 2% in Q4.

The Philly Fed manufacturing gauge fell to negative 10.5 this month, down from negative 5.9 in November, where any reading under zero represents contraction. It was the 17th negative reading in 19 months.

The Conference Board’s index of leading economic indicators fell another 0.5% in November, notching 20 straight monthly declines, the most since the Great Recession from 2007 to 2009. The Conference Board is forecasting a shallow recession in 2024.

Initial jobless claims rose a minor 2,000 to 205,000 last week, suggesting few layoffs.

The dollar fell 0.6% against major rivals as traders bet that weak US data will encourage the Fed to begin cutting interest rates in March. CME FedWatch now places the odds of a March cut at 83%, up from 79% yesterday.

Falling rates pressure the dollar by making it less attractive to Forex investors seeking higher yield. A weaker dollar supports gold and other commodities by making them cheaper in other currencies, boosting overseas demand.

The other precious metals were mixed, with silver and platinum slipping 0.2% and 0.4%, respectively, while palladium edged up 0.1%.

At the Comex close: February gold gained $3.60 to $2,051.30; March silver dipped a nickel to $24.59; January platinum slid $3.70 to $970.30; and March palladium picked up $1.30 to $1,228.20 an ounce.