Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinSpot gold slid 0.8% to close under $2,027 despite pullbacks in yields and the dollar as oil prices tumbled on global demand concerns and equities rose, undercutting alternative assets.

US benchmark WTI crude notched its biggest daily drop since November, tumbling 4.1% to under $71 per barrel, after Saudi Arabia cut its prices to all regions and OPEC increased production. The Saudi discount was seen as reflecting worries about global demand, with China’s economy sputtering and US shale production increasing.

Gold often trades in sympathy with oil as a hedge against energy-related inflation.

Benchmark 10-year Treasury yields pulled back under 4% after a New York Fed survey showed US consumer inflation expectations falling to the lowest levels in three years. By this time next year, inflation is expected at 3%, down from 3.4% in November. And prices are seen as falling further after that, with inflation at 2.6% I there years and 2.5% in five years.

The dollar also lost ground, shedding 0.2% against major rivals as traders digested mixed US economic data ahead of Thursday's CPI release.

Friday’s nonfarm payrolls report had a robust headline number of 216,000 jobs added, but some details were less auspicious. Jobs added the previous two months were revised lower by 71,000, and household employees like nannies, babysitters, housekeepers, and gardeners plunged by a whopping 635,000.

In addition, the labor market is showing real weakness in the crucial services sector, according to the latest ISM data. Employment plunged to 43.3 last month, the lowest since July 2020, when the economy was in the depths of the pandemic. The services sector comprises around two-thirds of the economy. A reading under 50 indicates contraction.

All three major US stock indexes rose today, pulling money away from safe havens. The Dow added 0.6% while the S&P 500 picked up 1.4% and the Nasdaq jumped 2.2%.

The other precious metals were mostly lower, with silver finishing unchanged while platinum and palladium lost 1.3% and 3.7%, respectively.

At the New York spot close: gold fell $15.80 to $2,026.60; silver was flat at $23.12; platinum shed $12.40 to $959.40; and palladium lost $38.40 to %998.70 an ounce.