Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained for a second session, adding 0.1% to close above $1,777, as the dollar slid on expectations for further pandemic stimulus, lifting alternative stores of value. The metal still had its toughest week since early January, sliding 2.5%.

Treasury Secretary Janet Yellen again called for Congress to pass the Biden $1.9 trillion stimulus package, warning that recent improvement in the economy is no reason to scale back aid. The economy is in "a deep hole," the former Fed Chair told CNBC, with 2020 being "the worst year for economic growth since WWII."

Separately, New York Fed President John Williams also said the economy has a long way to go to achieve full strength, rejecting worries that additional fiscal support will cause overheating and excessive inflation.

Williams signaled that the Fed's loose monetary policies of near-zero interest rates and $120 billion per month in quantitative easing are expected to continue for the foreseeable future.

Factory activity cooled slightly in early February, according to the IHS Markit flash manufacturing index. But the composite PMI showed overall national business activity rising to the highest level in nearly six years.

The dollar fell 0.3% against major rivals as Forex traders shifted toward riskier currencies like the UK pound. A weaker dollar supports gold and other commodities by making them cheaper overseas.

Treasury yields rose again, capping gold's gains, as bond traders positioned themselves for higher inflation. Yields on 10-year and 30-year notes saw their sharpest weekly rise since early January, knocking gold substantially lower.

While gold is a popular hedge against inflation, rising yields can pressure the metal in the short term by increasing the opportunity cost for holding it instead of bonds.

The other precious metals were higher for the day and mixed for the week. Silver rose 0.7% for a weekly dip of less than 0.1%. Platinum climbed 1.4% on the day and 2% on the week. Palladium picked up 0.9% today but lost 0.4% for the week.

At the Comex close: April gold added $2.40, to $1,777.40; March silver gained 18 cents to $27.25; April platinum rose $18.40 to $1,293.10; and March palladium climbed $20.40 to $2,369.20 an ounce.