Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.6% to close near $1,855 as accelerating inflation and pandemic deaths combined with the pending impeachment of President Trump to lift demand for alternative assets despite modestly higher equities.

Consumer prices rose 0.4% in December to an annualized 1.4%, the fastest rate since August, behind escalating costs for food and gasoline. The core CPI excluding food and energy increased 0.1% to an annualized 1.6%.

Separately, the Atlanta Fed's so-called sticky price CPI, which tracks a basket of items that change price infrequently, rose to an annualized 2%.

Rising prices are often bullish for gold in its traditional role as a hedge against inflation.

The dollar also rose on the increase in inflation, adding 0.3% and creating mild headwinds for gold as trader speculate that higher prices will ultimately lead the Fed to raise interest rates. Fed officials have repeatedly pledge to keep rates near zero through 2023.

The US reported more than 4,400 deaths from COVID-19 yesterday, the highest single-day total since the pandemic began. New daily infections have increased by 37% over the past week across the country, with experts warning that the worst is yet to come.

The pandemic is again weighing on economic growth, with the Fed's Beige Book reporting one third of its 12 districts have fallen to flat or declining activity because of the coronavirus.

Meanwhile, Congress is set to vote on a second impeachment of President Trump, this time because of his role in the deadly riot at the Capitol Building last week.

Shrugging off the impeachment and the pandemic, Wall Street closed modestly higher as traders look ahead to the additional fiscal stimulus expected from the Biden Administration in concert with a Democratic Congress. The Dow edged up 0.1% while the S&P 500 and Nasdaq added 0.4% and 0.5%, respectively.

US 10-year Treasurys rallied alongside gold, however, on flights to safety, driving yield slower.

The other precious metals were also higher, with silver climbing 0.5% while platinum and palladium picked up 2.2% and 0.9%, respectively.

At the Comex close: February gold gained $10.70 to $1,854.90; March silver rose 14 cents to $25.57; April platinum jumped $42.90 to $1,110.70; and March palladium rose $20.90 to $2,397.10 an ounce.