Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold rallied 0.6% to close at a new record high near $2,926 as mixed inflation data and worries over tariffs spurred flights to safety while pressuring Treasury yields and the dollar. Silver dipped 0.2% to finish at $32.65 an ounce.

The producer price index climbed 0.4% in January, more than forecast, to lift the 12-month rate for wholesale inflation to 3.5% from 3.3% in December. The so-called core rate, minus food and energy, rose a more modest 0.3%, dropping the 12-month rate to 3.4% from 3.5%.

The data followed yesterday�s CPI print showing that consumer inflation rose 0.5% in January, the most in 18 months.

However, subcomponents within the PPI report indicate that core personal consumption expenditures, the Fed�s preferred inflation gauge, are rising more slowly than the CPI. The softer core PCE data prompted traders to increase their rate-cut bets to 33 basis points by December, up from 29 basis points yesterday, according to CME FedWatch.

Separately, President Trump laid out his plans for reciprocal tariffs against all trading partners, including EU countries that have a Value Added Tax, which is essentially a sales tax, on all consumer goods. Economists have warned that the aggressive tariff plans are inflationary and risk trade wars that could damage the US economy.

Benchmark 10-year Treasury yields tumbled 8 basis points on flights to safety after the tariff announcement, boosting gold by decreasing the opportunity cost for holding it instead of bonds.

Platinum fell 3.7% while palladium rose 1.7%.

At the New York spot close: gold gained $16.90 to $2,925.90; silver slipped a nickel to $32.65; platinum shed $39.50 to $999.20; and palladium picked up $16.40 to $997.20 an ounce.