Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold inched down 60 cents to close under $1,866 after better-than-expected economic data and hopes for additional stimulus lifted equities and bond yields, prompting some traders to take profits from the metal's recent rally to a two-week high.

The Philly Fed's index of business conditions in the Mid-Atlantic region jumped to pre-pandemic levels, with factory orders and shipments rising sharply despite surging infections. Separately, construction of new homes surged nearly 6% in December from the previous month, signaling strong momentum tum in the crucial national housing market.

Meanwhile, initial jobless claims slipped slightly last week to 900,000 through state agencies, 26,000 fewer than in the previous week. An additional 423,700 were files through the COVID-19 federal relief program.

Wall Street bumped higher on the upbeat data, with the S&P 500 and Nasdaq hitting new record highs. Also fueling risk appetite is the expectation that the new Biden administration will deliver additional pandemic relief in coming weeks. House Democrats have proposed a massive $1.9 trillion in new aid, which still must pass through the Senate.

Treasury prices fell, lifting yields, as investors speculate that additional fiscal spending will lift inflation. The dollar lost 0.4% against major rivals, limiting gold's slide, as Forex traders shifted into riskier currencies. Higher yields typically pressure gold by increasing the opportunity cost for holding it instead of bonds, while a weaker dollar supports gold by making it cheaper overseas.

The other precious metals were mixed, with silver and platinum rising 0.3% and 1%, respectively, while palladium fell 1.2%.

At the Comex close: February gold inched 60 cents lower to $1,865.90; March silver slid 9 cents to $25.85; April platinum rose $11.60 to $1,128; and March palladium dropped $28.10 to $2,375.10 an ounce.