Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold slid 0.8% to close near $2,617 in thin trade as rising Treasury yields and worries about the potentially inflationary policies of the incoming Trump administration pressured alternative stores of value. Bullion slipped 0.4% for the holiday-shortened week but remains 28% higher for the year. Silver dropped 1.3% to end at $29.66, unchanged for the week.

The US trade deficit jumped nearly 5% in November to stay near an all-time high as Americans bought foreign goods ahead of the tariffs proposed by Donald Trump. With the US economy much stronger than its peers, the trend is expected to continue into 2025.

Benchmark 10-year Treasury yields crept back above 4.6% as concerns remain about sticky inflation despite last week’s surprisingly soft PCE index, which grew just 0.1% in November. Rising yields weigh on gold by increasing the opportunity cost for holding it instead of bonds for safety.

President-elect Trump’s proposals to levy huge tariffs on major US trading partners are widely expected to raise prices on imported goods and raw materials, rekindling inflation. In addition, his promised deportation of unskilled workers is expected to reduce the supply of cheap labor, especially for farmers, further adding to costs passed along to consumers.

Despite recent pullbacks, gold’s record-setting rally in 2024 is widely forecast to extend well into 2025 and perhaps beyond. Aggressive buying by global central banks and extreme volatility in the Middle East and Ukraine have provided strong support this year and will continue to do so. Plus, the uncertainty surrounding Trump policies is projected to drive additional demand for safe havens.

Platinum fell 2.9% for a weekly loss of 1%. Palladium gained 1.6% today but dipped 0.4% this week.

At the New York spot close: gold dropped $21.60 to $2,617.20; silver slid 39 cents to $29.66; platinum fell $27.30 to $924.90; and palladium added $15.10, to $921.50 an ounce.