Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.6% to close at a two-week high above $1,322 as soft US data and optimism over US-China trade negotiations weakened the dollar, boosting appetite for alternative stores of value. The metal rose 0.3% for the week.

Beijing signaled that it plans to import more US goods, especially semi-conductors, in order to ease trade conflicts with the US. While the two sides remain deadlocked on some important issues, the news marks progress in overcoming the war of tariffs that has stymied growth in the world's two largest economies.

US industrial production fell in January for the first time in eight months, with weakness in all sectors but mining. Manufacturing has slipped into a mild recession because of pressure from the trade war and China's economic slowdown, according to analysts.

Import prices fell 0.5% in January for the third straight month of declines as the cost of fuel dropped 3.2%. Imports have fallen 1.7% in price over the past 12 months, helping to convince the Fed to pause rate hikes for now.

The dollar slipped on the softer data and upbeat news about China, with the ICE Dollar Index dropping nearly 0.2%. The buck still posted a weekly rise of 0.5% on safe-haven inflows because of fluctuations in US-China trade negotiations and worries earlier in the week about a possible government shutdown.

With a new budget bill passed into law, shutdown worries have now disappeared, removing some recent support for the dollar. Because the bill did not meet his needs for funding the wall on the Mexico border, President Trump has declared a state of emergency to draw funds from elsewhere. The market did not immediately react to this controversial action.

Oil rallied another 2.3% to more than $55 per barrel on China trade progress and production cuts from Saudi Arabia. Crude finished the week 5% higher. Gold often trade in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were higher for the day but mixed for the week. Silver rose 1.4% but still lost 0.4% this week. Platinum added 2.2% today for a weekly rise of 0.5%. Palladium climbed 1.5% today and 2.2% this week.

At the Comex close: April gold gained $8.20 to $1,322.10; March silver rose 22 cents to $15.74; April platinum picked up $17.70 to $806.90; and March palladium climbed $21.30 to $1,407.20 an ounce.