Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gold slipped 0.3% but held above $1,196 as oil fell and traders took profits from a four-day rally that propelled the metal to a seven-week high. After rising as high as $1,202 mid-session, gold closed the week 1.9% higher for a 3.9% gain so far this month.

Oil fell 0.8% to end the week 3% lower after China's exports fell by the most since 2009, raising concerns about global demand in 2017. The world's second largest economy, China imported a record-high 8.6 million barrels in December.

Continued weakness in exports is likely to weigh on Chinese consumption, damaging an otherwise bullish outlook for oil following OPEC's agreement in November to cut production for the first time since 2008. Gold often trades in sympathy with oil as a hedge against energy-inflation.

The dollar fell again, dropping another 0.2%, to finish its worst week in two months with a 1% loss.

In December, the buck pushed to a 14-year high on speculation that President-elect Trump's campaign promises of huge infrastructure spending with massive tax cuts would boost growth and inflation. With policies details in short supply, the dollar has now falling for three straight weeks as the initial euphoria wears off. A falling dollar supports gold and other commodities by making them less expensive overseas.

U.S. retail sales rose 0.6% in December behind strong demand for autos and furniture, signaling decent momentum to close the fourth quarter. Wholesale inflation rose 0.3% to lift the year-on-year rise to 1.6%, the most since September 2014.

The World Gold Council published its Major Gold Trends in 2017. Building on the strong performance in 2016, gold is expected to benefit from six major global trends this year: heightening geopolitical risk; currency depreciation; rising inflation expectations; overvalued stock markets; long-term Asian growth; and the opening of new markets.

The other precious metals were mixed ont eh day and week. Silver dropped 0.4% but closed the week 1.5% higher. Platinum added 0.2% today and 1.6% this week. Palladium lost 2.1% today but gained 1.2% this week.

At the Comex close: February slipped $3.60 to $1,196.20; March silver dropped 6 cents to $16.77; April platinum picked up $1.70, $986.40; and March palladium lost $16.10 to $749.15 an ounce.