Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.6% to close above $2,000 as sharply higher consumer prices and the Ukraine war stoked demand for inflation hedges and safe havens despite upticks in Treasury yields and the dollar.

The Consumer Price Index jumped another 0.8% in February to push the 12-month rate to 7.9%, the highest since January 1982. Rising food and gasoline costs were the primary drivers. Both are expected to accelerate in coming months because of oil and grain disruptions stemming the Russian invasion of Ukraine.

Wall Street retreated on the hot CPI, with the Dow and S&P 500 sliding 0.4% and 0.5% while the Nasdaq dropped 1%. Stalling negotiations between Russia and Ukraine also damped risk appetite, which had been whetted yesterday by news that talks had resumed.

Benchmark 10-year Treasury yields crept back toward 2%, capping gold's rise by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar also limited gold's rebound, adding 0.6% against major rivals as traders speculate that sharply higher inflation will encourage the Fed to raise interest rates more aggressively in coming months. Higher rates lift the dollar by attracting Forex investment seeking higher yield, pressuring gold in turn by making it more expensive in other currencies.

The other precious metals were mixed, with silver climbing 1,7% while platinum and palladium fell 1.1% and 1%, respectively.

At the Comex close: April gold gained $12.20 to $2,000.40; May silver rose 44 cents to $26.26; April platinum slid $12.40 to $1,095.20; and June palladium lost $29.30 to $2,920.50 an ounce, down 1%.