Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gold slipped 0.4% from a nine-week high to close under $1,211 as traders took profits and the dollar stabilized, reducing demand for alternative assets.

After falling to a seven-week low yesterday, the dollar edged up around 0.4% as traders covered shorts and looked for bargains. A rising dollar typically weighs on gold and other commodities denominated in it for international trade by making them more expensive overseas.

Before its recent sell-off, the buck had risen 4% to a 14-year high following the election of Donald Trump, driven by speculation that his promise to spend huge amounts on infrastructure while slashing taxes would fuel higher inflation and prompt the Fed raise interest rates.

But recent comments from Trump and Treasury nominee Steven Mnuchin suggesting that a stronger dollar may harm the economy, combined with a lack of overall policy details, have weighed heavily on the currency. In response, gold rose to a nine-week high near $1,216 yesterday.

The Dow, S&P 500, and Global Dow each gained 0.6% as investors responded to rising corporate earnings and improving global conditions. Profits for S&P 500 companies rose more than 6% in Q4. Japanese manufacturing expanding by the most in three years and business activity in France hit the highest level in more than five years.

The World Gold Council released its latest research on the Indian gold market, concluding that its population and income trends will support stronger demand for gold in coming years. India's economy is among the fastest-growing and its middle class, numbering around 250 million, is already the world's largest. WGC research found that every 1% rise in income boosts gold demand in India by 1%.

The other precious metals were mostly higher, with platinum and palladium gaining 2.9% and 3.2%, respectively, while silver finished virtually flat.

At the Comex close: February gold slipped $4.80 to $1,210.80; March was unchanged at $17.19; April platinum rose $27.90 to $1,007.80; and March palladium gained $24.35 to $795.85 an ounce.