Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold edged up 0.1% to close at $2,677.50 after softer-than-expected wholesale inflation pressured yields and the dollar, boosting alternative stores of value. Silver also added 0.1% to finish at $30.13 an ounce.

The producer price index rose 0.2% in December, half as much as forecast, suggesting that the upswing in prices over the past few months might be ending. The so-called core rate, less food and energy, rose just 0.1%. The PPI, which measures wholesale prices in the pipeline, tends to front-run consumer inflation by several months.

Tomorrow’s release of the CPI will give a better sense of the current condition of prices to consumers.

Benchmark 10-year Treasury dipped slightly after the PPI release as traders speculated that moderating inflation might convince the Fed to continue cutting interest rates. Lower rates boost gold by decreasing the opportunity cost for holding it instead of bonds for safety.

The dollar retreated 0.7% but hovered near a two-year high, helping gold and other commodities by making them less expensive overseas.

Platinum dropped 2.4% while palladium rose 1.2%.

At the New York spot close: gold gained $4 to $2,677.50; silver added 4 cents, to $30.13; platinum shed $22.75 to $939.35; and palladium picked up $11.55 to +$946.35 an ounce.