Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slipped 0.6% to close under $1,910 as upbeat global economic data lifted government bond yields, pressuring alternative stores of value and prompting traders to take additional profits from last week's rally to a 9-month high.

China's economy grew 3% last year, surprising the markets. It was the weakest pace since the 1970s but more than forecast and raised hopes that the world's second-largest economy could rebound sharply as it reopens after extreme Covid closures.

Germany's economic outlook improved dramatically in January, with an important survey of business sentiment rising jumping into positive territory from the deeply negative in December. Lower energy prices and the prospect of renewed trade with China drove the improvement.

And new data showed that the UK labor market stabilized in Q4, with declining job vacancies and higher wages.

US data was not so positive. New York's Empire State index of business conditions fell further into the negative in January, adding to concerns about a possible recession in 2023. The New York gauge is considered a weathervane for national manufacturing trends.

Yields on benchmark 10-year German bunds and UK gilts rose on the stronger data, which in turn pulled yields on US 10-year Treasurys higher despite the weak US data. Rising yields weigh on gold by increasing the opportunity costs for holding it instead of bonds as a safe-haven asset.

Goldman Sachs told clients today that It expects the gold price to trend around $1,950 this year as inflation wanes and the dollar weakens against to other currencies.

The other precious metals were also lower, with silver sliding 1.3% while platinum and palladium dropped 2.4% and 3%, respectively.

At the Comex close: February gold fell $11.80 to $1,909.90; March silver slid by 30 cents to $24.07; April platinum dropped $25.60 to $1,046.90; and March palladium shed $53.30 to $1,734 an ounce.