Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold rebounded 0.6% to close above $2,002 as soft data on retail sales and industrial output undercut yields and the dollar, lifting alternative assets.

Sales at US retailers fell 0.8% last month, four times the consensus forecast of 0.2%, for the biggest drop in 10 months. With retail sales accounting for around 40% of consumer spending, which in turn represents around 70% of GDP, the falloff in demand is seen as supporting the Fed’s path to 2% inflation.

Iin other data, US industrial output fell 0.1% in January, with manufacturing alone dropping 0.5%. The New York Fed’s manufacturing gauge rose in February but remained in the negative, while the Philly Fed gauge edged into the positive for the first time since August.

Benchmark 10-year Treasury yields fell to just over 4.2% as the net-negative data reinforced market expectations that the Fed will begin cutting interest rates in June. Fed fund futures trading sees a likelihood of nearly 79% of at least one quarter-point reduction by June. Falling yield hlp gold by decreasing the opportunity costs for holding it instead of bonds.

Tracking lower with yields, the dollar shed 0.4% against major rivals, lifting gold and other commodities priced in it for global trade by making them less expensive in other currencies, spurring overseas demand.

The other precious metals were also higher, with silver rising 2.5% while platinum and palladium climbed 0.9% and 1.9%, respectively.

At the New York spot close; gold gained $11.80 to $2,00210; silver added 56 cents, to $22.95; platinum picked up $7.90 to $905.20; and palladium rose $17.80 to $952.80 an ounce.