Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold rose 0.6% to close above $1,729 despite upbeat data and a stronger dollar as bond yields pulled back ahead of this week's Fed meeting. It was the metal's highest finish in nearly two weeks.

The Empire State manufacturing index rose in March to the highest level in eight months, beating forecasts as pandemic-related bottlenecks in supply lines lessened. Economists project the manufacturing sector to continue growing though the second quarter at least.

Stimulus payments from the $1.9 trillion Biden relief package began reaching people over the weekend. As the pace of vaccinations accelerates and more parts of the country reopen fully, optimism is growing for a robust rebound in the economy.

The Fed is expected to paint a rosier picture when it meets tomorrow to consider monetary policy no changes are expected in its current easy-month policy. While inflation expectations have been rising because of massive fiscal stimulus totaling some $2.8 trillion since December, the central bankers are expected to dismiss them as transitory.

Nonetheless, Treasury yields pulled back from recent highs as bond traders weigh the possibility that the Fed could decide to extend the duration of bonds purchased through quantitative easing, effectively pressuring yields.

Falling yields support gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Capping gold's gains, the dollar picked up nearly 0.2% on speculation that the US economy will outpace those of Europe and much of Asia. A rising dollar typically pressures gold and other commodities by making them more expensive in other currencies, undercutting overseas demand.

The other precious metals were also higher, with silver climbing 1.5% while platinum and palladium added 0.8% and 0.6%, respectively.

At the Comex close: April gold gained $9.40 to $1,729.20; May silver rose 38 cents to $26.29; April platinum added $9.20, to $1,209.50; and June palladium picked up $13 to $2,373.70 an ounce.