Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinConsolidating yesterday’s record rise, New York spot gold dipped 0.4% but held above $2,812 after Treasury yields and the dollar edged higher on a modest increase in PCE inflation. Bullion gained 7% for the month on safe-haven inflows, its best since last March. Silve slipped 0.7% to $32.13, posting an 11% rise in January.

The Commerce Department said the personal consumption expenditures index, the Fed’s preferred inflation gauge, rose 0.3% in December, lifting the 12-month rate to 2.6%. While in line with expectations, it was still the biggest rise in eight months.

The so-called core PCE, excluding volatile food and energy costs, rose a softer 0.2% to keep the 12-month rate steady at 2.8%.

Consumer spending, which constitutes around 70% of GDP, jumped 0.7% in December, signaling strong underlying momentum in the economy.

The robust consumer data and uptick in PCE inflation reinforces the Fed’s decision this week to pause its rate-cut cycle, if only for now. Fed Chair Jerome Powell said the central bank is “in no hurry” to reduce rate further.

President Trump’s plan to levy massive tariffs on Mexico, Canada, and China is widely expected to mean significantly higher prices for US consumers, fueling inflation and perhaps causing trade wars, which would further complicate the outlook for interest rates.

New York spot gold soared 7% in January to close at a new record high of $2,823 yesterday on safe-haven demand driven largely by confusion about the tariff policies and concerns about their impact on the economy and inflation.

Benchmark 10-year Treasury yields and the dollar both edged slightly higher on the PCE data and shifting rate view. Higher yields weigh on gold by increasing the opportunity costs for holding it instead of bonds. A stronger dollar pressures gold and other commodities by making them pricier overseas.

Platinum fell 3.4% today but rose 10% this month. Palladium added 1.2% for a monthly rise of 12.3%.

At the New York spot close: gold dropped $10.50 to $2,812.50; silver slid 24 cents to $32.13; platinum fell $34.35 to $982.15; and palladium picked up $12.35 to $1,016.95 an ounce.