Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold rose for the third straight session, inching up 0.1% to close above $1,153, as another round of weak U.S. economic data weighed on the dollar ahead of this week's meeting of the Federal Reserve.

Factory output fell in February for the third consecutive month as weak overseas demand combined with falling U.S. consumer sentiment and flagging retail sales to cut into production of autos and variety of other goods. Separately, manufacturing in the important New York Fed region contracted, with new orders falling to their slowest pace in 15 months, and homebuilder confidence declined to an eight-month low.

The recent succession soft data augurs a slowdown in economic growth during the first quarter, following an already slow fourth quarter, and is leading traders to speculate that the Fed will be less inclined to raise interest rates by midyear. The recent strength of the dollar, which has risen by an astonishing 24% since May, is also expected to delay rate hikes. The central bankers begin their March meeting on monetary policy tomorrow.

The dollar fell from 12-year highs on the soft data and Fed speculation, supporting gold and other commodities denominated in it for international trade by making them less expensive to users of other currencies.

The other precious metals were mixed, with silver gaining 0.8% while platinum and palladium rolled back 0.6% and 1%, respectively, on falling auto production. The PMGs are widely used in the manufacture of auto catalytic converters.

At the Comex close: April delivery gold gained 80 cents to $1,153.20; May silver rose 12 cents to $15.62; April platinum slid $7.30 to $1,107.90; and June palladium dropped $8.60 to $780.10 an ounce.