Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold rose 0.3% to finish above $1,945 after downbeat US data and improving labor costs pressured yields and the dollar, boosting alternative stores of value ahead of tomorrow's Fed decision on interest rates. The metal ended January with a gain of 6.5% for its third straight monthly win.

Consumer confidence slipped in January, according to the Conference Board, as Americans become increasingly nervous about the possibility of recession. Separately, the Chicago PMI measuring regional manufacturing activity fell deeper into the negative in January, posting its fifth consecutive month of contraction.

US labor costs rose more slowly than forecast in Q4, suggesting that a key driver of inflation may be waning. Most of the overall 1% rise in wages came in the highest-paid sector, information technology.

Benchmark 10-year Treasury yields slipped as traders weighed the soft data and easing labor costs ahead of tomorrow's conclusion of the Fed's policy meeting. The central bankers are expected to hike by a quarter-point, which would be the smallest increase since this cycle began 10 months ago. Falling yields support gold by decreasing the opportunity cost for holding it instead of bonds.

Tracking yields lower, the dollar slid 0.2% to post a monthly loss of 1.4% on expectations that the Fed will slow its rate-hike regimen. It was the buck's third straight losing month, knocking it nearly 9% below its recent peak in October. A weaker dollar lifts gold by making it cheaper overseas.

Global gold demand rose 18% in 2022 to reach its highest level since 2011, according to a new World Gold Council report. Investment demand jumped to 1,107 metric tonnes, up 10% from a year earlier. Buying by central banks surged to a 55-year high of 1,136 metric tonnes, notching its 13th straight year of net inflows.

The other precious metals were higher for the day but lower for the month. Silver added 0.4% today but lost 0.9% in January. Platinum picked up 0.1% for the session but dropped 5.7% for the month. Palladium rose 1.3% today but fell 8.3% in January.

At the Comex close: April gold added 6.10, to $1,945.30; March silver gained a dime 10 cents to $23.84; April platinum picked up 50 cents to $1,021.10; and March palladium advanced $20.30 to $1,648.30 an ounce.