Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold adding 0.3% to close near $1,722 after weaker-than-forecast consumer inflation pressured bond yields and the dollar, lifting alternative stores of value. It was the metal's second day of gains following yesterday's 2.3% surge, which was its biggest one-day advance since early January.

The Consumer Price Index rose 0.4% in February, slightly less than expected, behind sharply higher gasoline prices. The 12-month rate of inflation rose to 1.7% from 1.4% in January. Stripping out volatile food and energy costs, however, the so-called core CPI edged up just 0.1%, with the 12-month rate slipping to 1.3% from 1.4%.

Treasury yields receded for a second day as moderating inflation expectations reduced pressure to sell long-term bonds. Concerns about inflation have driven yields to one-year highs in weeks as vaccine rollouts and additional stimulus prosects have lifted optimism about the US recovery. Higher yields have pressured gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar slid 0.2% against major rivals as tepid inflation reduces the likelihood that the Fed will feel the need to tight monetary policy ahead of schedule. A falling dollar typically supports gold and other commodities by making them less expensive in other currencies, lifting overseas demand.

The other precious metals were mixed, with silver and palladium slipping 0.2% and 0.1%, respectively, while platinum added 2.2%.

At the Comex close: April gold rose $4.90 to $1,721.80; May silver dropped a nickel to $26.13; April platinum climbed $26.40 to $1,201.80; and June palladium added a dollar, to $2,293.20 an ounce.