Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slipped 0.3% to close just above $2,018 as yields and the dollar rose ahead of tomorrow’s release of the January consumer price index, pressuring alternative stores of value.

The dollar picked up 0.1% against major rivals, especially the euro, after Bank of Italy Governor Fabio Panetta said over the weekend, “disinflation is at an advanced stage” in the eurozone and a “rate reversal” for the European Central Bank is “is rapidly approaching.” A stronger dollar pressures gold by making it pricier in other currencies, limiting overseas demand.

Benchmark 10-year Treasury yields also crept a little higher but held under 4.2% ahead of the latest CPI data, which traders hope will provide new clues about the Fed’s outlook for interest rates. Higher yields weigh on gold by increasing the opportunity cost for holding it instead of bonds for safety.

Most economists expect headline annual inflation to have dropped under 3% for the first time in almost three years, according to the Wall Street Journal survey. But core inflation, minus food energy, is likely to remain elevated at 3.7%, complicating the Fed’s decision on how soon to lower rates.

The other precious metals were higher, with silver rising 0.8% while platinum and palladium picked up 2.2% and 3.1%, respectively.

At the New York spot close: gold dipped $5.10 to $2,018.20; silver rose 17 cents to $22.77; platinum gained $18.90 to $897.10; and palladium advanced $27.30 to $896.60 an ounce.