Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold surged another 1.2% to close near $1,922 as investors bet that weakening inflation will make the Fed less aggressive in raising interest rates. The metal added 2.8% for the week to notch its first finish above $1,900 since last April.

Gold also achieved what traders call a "golden cross," with its 50-day moving average crossing above its 200-day moving average, for the first time in nearly a year. Considered a bullish development, a golden cross often attracts more technically-oriented buyers to the market, further lifting prices.

Yesterday's CPI release showed inflation fell 0.1% in December for its first monthly decline since start of the pandemic in 2020. The data is widely expected to encourage the Fed to go slower with interest rate increases in coming months.

Consumer sentiment rose to a 9-month high in January as Americans became more optimistic that peak inflation has passed. But the University of Michigan index reading of 62 is still considered weak, especially compared to its pre-pandemic peak of 101, with consumers increasingly worried about a recession.

Benchmark 10-year Treasury yields were flat, hovering around 3.5% and the dollar was little changed at 7-month low. The gentler rate outlook expected from the Fed puts downward pressure on both yields and the buck by reducing the projected rate differential between the Fed and other major central banks.

Sharply higher oil prices are also underpinning gold's rally. US benchmark WTI crude added another 2% to score a weekly rise of more than 8% on speculation that China's reopening will stoke energy demand. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were mixed for the day and week. Silver rose 1.5% today and 1.6% this week. Platinum lost 1.1% for a weekly drop of 2.9%. Palladium dipped 0.2% today and 1.1% this week.

At the Comex close: February gold gained $22.90 to $1,921.70; March silver climbed 37 cents to $24.37; April platinum slid $11.80 to $1,072.50; and March palladium slipped $3.60 to $1,787.30 an ounce.