Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold futures eased 0.6% to close under $2,072 as yields and the dollar ticked up slightly on the final trading day of 2023. Adding 1% in December, the metal gained an impressive 13.4% for the year, driven by the conclusion of the most aggressive rate-hike cycle by the Fed in 40 years.

The dollar added less than 0.2% against major rivals but hovered near a five-month low on expectations that interest rates will fall more quickly in the US than in other major economies. For the year, the buck shed around 2%, fueling gold’s rally by making it cheaper overseas.

Benchmark 10-year Treasury yields perked up a bit to nearly 3.9% but also remained near a five-month low on the radically shifting rate view. Fed fund futures traders are pricing in a rate cut in March with almost 90% certainty, and project total rate cuts of 1.5% by next December.

Falling yields are bullish for gold because they decrease the opportunity cost for holding it instead of bonds as a safe-haven asset.

Gold futures reached a new record close above $2,093 earlier this week as the primary headwinds of high yields and a strong dollar began to subside in earnest. Investors broadly anticipate new record highs in 2024 the monetary tightening unwinds, the economy slows further, and geopolitical risk in Ukraine and the Middle East fuel safe-haven demand.

The other precious metals were down for the day and mixed for the month and year. Silver slipped 1.1% today and 6.1% this month but was virtually unchanged for the year. Platinum dropped 1.4% for the session while gaining 7.8% for the month and losing 6.7% for the year. Palladium shed 2.7% today, rose 8.7% for the month, yet tumbled a stunning 38% this year.

At the Comex close: February gold slid $11.70 to $2,071.80; March silver shed 28 cents to $24.09; April platinum lost $14 to $1,009.20; and March palladium dropped $30.90 to $1,109.30 an ounce.