Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold dipped 0.2% to close under $1,720 after the Covid relief package and rising inflation expectations rallied bond yields and the dollar, pressuring alternative stores of value. The metal still gained 1.3% for the week.

President Biden signed into law yesterday his $1.9 trillion relief package aimed at supporting unemployed workers and strapped local governments. Direct payments of $1,400 could be received by qualifying Americans as early as this weekend.

Consumer sentiment jumped in early March to the highest level since the pandemic began, according to the University of Michigan survey, with growing optimism driven by the anticipation of stimulus checks and vaccines.

Wholesale inflation rose sharply last month, with the PPI for final demand adding 0.5%. While less than January's jump of 1.3%, the February totals pushed the 12-month increase 2.8%, a 2.5-year high. Expectations for consumer inflation eased, however, as slack in the labor market will make it difficult to pass on the higher producer costs.

Yields on benchmark 10-year Treasurys bounced back near a one-year high above 1.6% as bond traders bet on higher inflation. Higher yields weigh on gold by increasing the opportunity cost for holding the metal instead of bonds as a safe-haven asset.

The dollar tracked higher with bond yields, adding 0.4% against major rivals as traders speculate that a stronger US economy may induce the Fed to raise interest rates ahead of schedule. A rising dollar weighs on gold and other commodities by making them pricier overseas.

The other precious metals were mixed for the day and higher for the week. Silver receded 1.1% today but still gained 2.5% this week. Platinum slipped 0.2% but held a weekly rise of 6%. Palladium rose 0.8% for a gain of 1.4% this week.

At the Comex close: April gold dipped $2.80 to $1,719.80; May silver dropped 28 cents to $25.91; April platinum slid $2 to $1,200.30; and June palladium rose $19.10 to $2,360.70 an ounce.