Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold dipped 0.1% to close under $1,842 ahead of the release of the minutes from the Fed's last meeting, and then slid lower to $1,835 after the central bankers were seen to agree on need for further rate increases.

Minutes from the early February Fed meeting showed almost all members agreeing that inflation risks continue to be "a key factor in shaping the policy outlook" and rates must climb further "until inflation is clearly on a path to 2%."

Additionally, a solid majority advocated the smallish increase of 25 basis points, with "few" pressing for a bigger half-point hike.

Benchmark 10-year Treasury yields rose after the Fed minutes on the prospect of further rate hikes, pressuring gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset. Yields subsequently retreated, however, as investors became fearful that the Fed could push the economy into a recession by tightening too much.

St. Louis Fed chief James Bullard pushed back on the fears of an economic downturn, saying the markets are "overpricing the chance of a recession" this year. A leading policy hawk, Bullard warned that failing to control inflation quickly would risk a return to the 1970s.

The dollar added 0.3% against major rivals, undercutting gold and other commodities by making them more expensive in other currencies.

Falling oil also weighed on the metal. US benchmark WTI crude fell 3.2% for its sixth straight day of losses as traders speculated that aggressive rate hikes would lead to slower growth and lower demand. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were mostly lower, with silver and palladium losing 1% and 2.5%, respectively, while platinum added 0.5%.

At the Comex close: April gold dipped $1 to $1,841.50; March silver slid cents to $21.68; April platinum picked up $4.70, to $953.30; and March palladium shed $38.50 to $1,482.20 an ounce.