Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold tumbled 4.1% to close under $1,836 as rising government bond yields and a stronger dollar undercut demand for alternative stores of value. Suffering its biggest one-day drop since early November, the metal finished the week down 3.2%.

US Treasury yields extended their rise, logging the biggest weekly increase since June on speculation that unified government under Biden administration will increase pandemic aid and spending on infrastructure, fueling higher inflation.

The worst employment report since last April also lifted yields after the Labor Department reported 140,000 jobs were lost in December, strengthening the case for more fiscal stimulus. Rising yields pressure gold by increasing the opportunity cost for holding the metal instead of bonds.

The dollar rose 0.3% alongside yields, further weighing on gold and other commodities priced in it for global trade by making them more expensive in other currencies.

Fed Vice Chairman Richard Clarida said today that the Fed's monthly purchases of Treasurys and mortgage-backed securities should continue at its current pace for $120 billion per month for all of 2021, at least. Known as quantitative easing, this program is considered bullish for gold in the longer term because it weakens the dollar and boosts inflation.

The other precious metals were also lower for the day and week. Silver lost 9.6% for a weekly loss of 6.7%. Platinum fell 4.7% today and 0.7% this week. Palladium dropped 2.7% for a decline of 3.6% this week.

At the Comex close: February gold dropped $78.20 to $1,835.40; March silver lost $2.62 to $24.64; April platinum shed $53.30 to $1,071.30; and March palladium fell $66.60 to $2,365 an ounce.