Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gold steadied, finishing virtually flat at $1,225.50, while the dollar edged higher on solid factory data and a hawkish Fed, cutting into safe-haven demand.

New orders for manufactured goods rose 1.2% in January, marking two straight months of gains and suggesting that the long-beleaguered U.S factory sector is gaining momentum. Accounting for 12% of GDP, manufacturing has been hampered by the strong dollar, makes U.S. products less price-competitive overseas.

the dollar gained around 0.3% against major rivals, boosted by the upbeat data and recent statements by Fed members signaling the likelihood of a rate hike later this month. Fed Governors Jerome Powell and Lael Brainerd said early last week that the case for a March hike is building. Fed Chair Janet Yellen confirmed this viewpoint on Friday, saying "a further adjustment" of monetary policy would "likely be appropriate" soon.

CME Fedwatch raised the probability of a March hike to 86% today, up from 80% on Friday and 36% last Monday. Rising interest rates support the dollar by attracting foreign exchange investment seeking higher yield, which in turn can weigh on gold and other commodities by making the more expensive.

Offsetting rate-view pressure, safe-haven bids supported gold because of rising geopolitical uncertainty after China cut its growth forecast and North Korea test-fired new ballistic missiles.

The other precious metals were mixed, with silver and palladium adding 0.2% and 0.7%, respectively, while platinum fell 1.6%.

At the Comex close: April gold dipped $1 to $1,225.50; May silver added 3 cents, to $17.77; April platinum dropped $15.90 to $978.20; and June palladium rose $5.45 to $773.15 an ounce.