Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold slid 0.4% in thin trade to hold above $2,606 despite falling Treasury yields as the dollar crept higher and traders squared their year-end books. Silver dropped 1.9% to finish at $29.11 an ounce.

The dollar rose 0.1% against a basket of major rivals, remaining near a two-year high on expectations the Fed will slow its unwinding of interest rates in 2025. The buck is up around 6.6% this year, driven by the relative strength of the US economy versus its peers.

A strong dollar creates headwinds for gold and other commodities by making them pricier in other currencies, reducing demand overseas.

Gold’s slide was backstopped by a sharp drop in benchmark 10-year Treasury yields. Yields jumped in recent weeks on worries that upbeat US economic data was reviving inflation. But the Fed’s preferred inflation gauge, the PCE index, was weaker than expected in November, quelling reflationary fears and easing bond yields.

Lower yields typically support gold by decreasing the opportunity cost for holding it instead of bonds.

Bullion has risen around 27% this year behind aggressive buying global central banks, lower interest rates in most major economies, and extreme geopolitical turmoil because of wars in Ukraine and Gaza. The same drivers are in place for 2025.

Platinum lost 1.6% while palladium inched up less than 0.1%.

At the New York spot close: gold slipped $11.10 to $2,606.10; silver shed 55 cents to $29.11; platinum fell $15.10 to $902.40; and palladium added 60 cents, to 894.20 an ounce.