AGE Daily Gold Update

AGE Daily Gold Update presents a recap on today's action in the precious metals markets. View archives.

5/17/2024: Gold closes at new record high

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold jumped 1.3% to close at a new all-time high above $2,417 as weak US data pressured the dollar and China unveiled stimulus to support its devastated real estate market. The metal ended the week 1.8% higher. Silver surged 4.7% to finish at $31.05, the highest level in 11 years, for a weekly gain of nearly 10%.

The People's Bank of China announced an "historic" $183 billion in stimulus to support its collapsing real estate sector, which accounts of nearly a fifth of China's GDP. With new home prices falling for 10 straight months, a string of defaults by major developers, and property investment tumbling 10% so far this year, the sector has been a major drag on China's economy.

The influx of stimulus money is expected to benefit commodities and especially retail gold investment, which has become a major alternative to stock and real-estate market investing for many middle-class Chinese citizens in 2024.

Closer to home, the Conference Board reported that the leading indicators for the US economy plunged 0.6% in April, pointing to "serious headwinds to growth." After two years of declines, the index turned positive in February for one month.

The dollar edged down slightly as the downbeat data combined with this week's reports of falling consumer inflation and weak retail stales to boost expectations that the Fed will begin cutting interest rates in September. The buck is down 0.8% for the week and 1.7% this month, lifting gold and other commodities by making them cheaper in other currencies.

Platinum rose 1.7% for a monthly gain of 8.2%. Palladium picked up 1.2% today and 3% this week.

At the New York spot close: gold jumped $31.90 to $2,417.40; silver surged $1.38 to $31.05; platinum added $18.70, to $1,090; and palladium picked up $12.40 to $1,010.80 an ounce.

5/16/2024: Gold slides on import prices

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold slid 0.8% to close at $2,385.50 as higher import prices and Fed jawboning boosted the dollar, prompting trades to take profits from yesterday's 1.5% rise to a one-month high. Silver added 0.5% to finish at $29.67 an ounce.

The cost of imported goods jumped 0.9% in April, the fastest pace in two years and triple most forecasts. It was the fourth consecutive month of rising import prices, adding to the Fed's concern that inflation remains sticky in some areas of the economy.

The news took a bit of glow off yesterday's cooler CPI print. US consumer inflation fell to 3.4% on an annualized basis in April, prompting traders to increase their best that the Fed will begin cutting interest rates in September.

The odds slipped a bit on the import price data, from 73% yesterday to 67% today, according to CME FedWatch.

Meanwhile, several regional Fed officials offered comments intended to talk the market down from rate-cut exuberance. The New York Fed's John Williams said lower rates are unlikely "in the very near term." Loretta Mester of the Cleveland Fed said, "progress on inflation has been disappointing," but it's too early to conclude it is "poised to reverse course."

The dollar rebounded 0.2% against major rivals, pressuring gold and other commodities by making them pricier overseas. Benchmark 10-year Treasury yields were little changed, edging down a few basis points.

Platinum inched up less than 0.1% while palladium dropped 1.6%.

At the New York spot close: gold slid $9.40 to $2,385.50; silver added 15 cents, to $29.67; platinum picked up $1.20 to $1,071.30; and palladium fell $16.60 to $998.40 an ounce.

5/15/2024: Gold surges on cooling inflation

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold surged 1.5% to close near $2,395 as cooling inflation and soft US economic data boosted rate-cut expectations, pressuring yields and the dollar. It was the metal's highest finish in a month. Silver jumped 3.6% to $29.51 an ounce.

The consumer price index rose 0.3% in April, less than forecast, bringing the 12-month inflation rate down to 3.4% from 3.5% in March. The so-called core CPI also eased to 0.3%, lowering the 12-month rate to 3.6%, the lowest since April 2021.

Separately, US retail sales were flat in April after rising 0.6% in March, suggesting that consumer are becoming more careful with expenditures, a sign of a slowing economy. Consumer spending accounts for 70% of GDP.

Adding to the soft data, New York's Empire State index of business conditions fell further into the negative in May, tracking with deterioration in the national ISM manufacturing index in April.

Benchmark 10-year Treasury yields receded to a five-week low under 3.35% as investors speculated that softening inflation and a slower economy will prompt the Fed to cut interest rates in September. Falling yields boost gold by decreasing the opportunity cost for holding it instead of bonds.

Fed fund futures traders now see a 75% chance of a quarter-point cut in September, up from 66% yesterday, according to CME FedWatch.

The dollar plunged 0.7% to a one-month low against major rivals on the shifting rate view, lifting gold and other commodities by making them cheaper in other currencies.

Platinum and palladium rose 2.4% and 3.3%, respectively.

At the New York spot close: gold surged $35 to $2,394.90; silver jumped $1,03 to $29.51; platinum picked up $25.50 to $1,070.10; and palladium advanced $32.60 to $1,015 an ounce.

5/14/2024: Gold gains after 'mixed' PPI

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold rose 0.7% to close just under $2,360 as the dollar and yields pulled back on what Fed Chair Jerome Powell called a "mixed" report on wholesale inflation. Silver added 0.9% to finish at $28.49 an ounce.

The producer price index rose 0.5% In April, more than expected, pushing the 12-month rate to 2.2% from 1.8%. But the March PPI was revised lower, from the 0.2% gain initially reported down to a negative 0.1%.

Speaking in Amsterdam, Jerome Powell downplayed the stickiness of the inflation data, calling the report more "mixed" than "hot" and expressing confidence that consumer inflation remains on track for the Fed's target 2%.

Apparently focusing more on the March revision than the April print, Fed funds futures traders now see a 66% likelihood of a quarter-point rate cut in September, up from 61% yesterday, according the CME FedWatch.

Tomorrow's CPI report should give further clarity on the course of inflation and therefore interest rates.

Benchmark 10-year Treasury yields retreated slightly after the PPI release, supporting gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Tracking lower with yields, the dollar lost 0.2% against major rivals, boosting gold and other commodities by making them less expensive in other currencies.

Platinum and palladium jumped 3.3% and 1.7%, respectively.

At the New York spot close: gold gained $16.90 to $2,359.90; silver added 26 cents, to $28.49; platinum picked up $33.80 to $1,044.60; and palladium rose $16.60 to $982.40 an ounce.

5/13/2024: Gold falls on profit-taking

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold fell 1.3% to close at $2,343 despite downticks in yields and the dollar as traders took profits from last week's 2.9% rally ahead of key CPI data this week. Silver slipped 0.2% to finish at $28.22 an ounce.

Recent data showing weakness in the labor market and consumer sentiment have shifted the outlook for interest rates from mildly hawkish to moderately dovish, with every notably economic report adding to further speculation in either direction.

The new consumer inflation and retail sales data due Wednesday could go far toward determining whether the Fed pivots to lower rates in coming months. After adding 0.4% in March, consumer inflation is forecast to moderate to 0.3% in April. If retail sales also softened, the Fed would feel far more comfortable cutting rates this year.

Fed fund futures put the odds of an initial quarter-point cut in September at 61%, with the chances of two cuts by December at around 50/50.

Benchmark 10-yer Treasury yields and the dollar both edged down as traders hedged against the possibility of a dovish turn.

While gold remains supported by unprecedented central bank buying and aggressive physical demand in China, its trading direction in the short term is likely to be choppy, guided largely by the fluctuating prospects for US interest rates.

Platinum picked up 0.4% while palladium fell 1.6%.

At the New York spot close: gold fell $32 to $2,343; silver slipped a nickel to $28.22; platinum picked up $3.60 to $1,010.80; and palladium shed $15.90 to $965.80 an ounce.

5/10/2024: Gold scores best week in five

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold gained 1.5% to close at $2,375, the highest level in nearly three weeks, as weak jobs and consumer data combined with net-dovish Fed comments to reinforce expectations of lower interest rates. Gold rose 2.9% for the week, its best week in five. Silver rose 0.5% to finish at $28,28 and post a weekly gain of 6.9%.

Recent data releases have pointed to a softening of the labor market, something the Fed has been awaiting before pivoting to rate cuts. First-time jobless claims rose to a nine-month high last week, while nonfarm payrolls added an anemic 175,000 jobs in April.

In addition, the University of Michigan's consumer-sentiment index tumbled in April to the lowest reading in six months, while inflation expectations for the next year rose to 3.5% from 3.2% in March. Consumer spending accounts for roughly 70% of GDP.

Several prominent Fed officials weighed in on interest rates today, with the overall stance leaning dovish. Dallas Fed Reserve President Lorie Logan said it's "not clear" whether monetary policy is tight enough. But Chicago Fed President Austan Goolsbee said policy is already "relatively restrictive" and Atlanta Fed President Raphael Bostic said the Fed on track to cut rates this year.

Fed funds futures traders expect two rate reductions of 25 basis points this year, with the first coming in September.

Treasury yields and the dollar were both little changed.

After reaching a new all-time high above $2,400 in late April, the gold price consolidated in recent weeks as the fears of a direct conflict between Israel and Iran receded. Now fundamentals are reasserting themselves. Gold remains supported by unprecedented central bank buying, aggressive physical demand in China, and the prospects of falling interest rates at home and abroad.

Platinum picked up 1.7% today and 4.3% this week. Palladium rose 1% for a weekly gain of 3.5%.

At the New York spot close: gold gained $34.70 to $2,375; silver added 14 cents, to $28.28; platinum picked up $16.40 to $1,007.20; and palladium rose $10.40 to $981.70 an ounce.

5/9/2024: Gold rises with jobless claims

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold gained 0.8% to close above $2,340 after higher-than-expected jobless claims weakened the dollar, lifting alternative stores of value. Silver surged 2.8% to finish at $28.13 an ounce.

First-time filings for unemployment benefits jumped 22,000 to 231,000 last week, the highest level in nine months. Following last week's nonfarm payrolls report showing just 175,000 new jobs added in April, and other data indicating that job openings fell to a three-year low in March, the rising jobless claims suggest a softening of the labor market.

The dollar fell 0.2% against major rivals as traders speculated that the Fed may be more inclined to reduce interest rates if a weaker job market leads consumers to slow spending and thereby lower inflation. A weaker dollar boosts gold and other commodities by making them less expensive on other currencies, lifting overseas demand.

Benchmark 10-year Treasury yields were little changed, edging down a couple of basis points to 4.46.

Crude rose for a second session, adding 0.7% to nearly $80 per barrel on an unexpected drop in US reserves. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

Platinum and palladium rose 0.6% and 1.6%, respectively.

At the New York spot close: gold gained $18 to $2,340.30; silver surged 77 cents to $28.13; platinum picked up $6.20 to $990.80; and palladium climbed $15 to $971.30 an ounce.

5/8/2024: Gold sideways ahead of data

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold was nearly flat, inching down less than 0.1% to hold above $2,322 despite upticks in Treasury yields and the dollar as traders tread water ahead of further clues about the direction on interest rates. Silver added 0.2% to finish at $27.36.

Boston Fed President Susan Collins said today that she was "not surprised" by the recent stickiness of inflation but expects interest rates at current levels will be enough to bring it back toward the Fed's target 2%.

Collins's stance aligns with Tom Barkin of the Richmond Fed and John Williams of the New York Fed President, who indicated on Monday that rate cuts, not hikes, would be the Fed's next move. Her comments contrasted with those of Minneapolis Fed President Neel Kashkari, who said yesterday that another rate hike was possible.

Benchmark 10-year Treasury yields moved slightly higher but remained under 4.5% on Kashkari's mildly hawkish rate view. Higher yields weigh on gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar also edged up on expectations that the US economy will outperform the Eurozone in the coming months.

Fed fund futures traders still expect the Fed to cut rates twice this year by 25 basis points each. Last week's weak payrolls data showing just 175,000 new jobs added in April helped to lift expectations from a single rate cut in 2024.

Now traders await the University of Michigan's consumer sentiment report on Friday and the April CPI reading next Wednesday for additional clues on the course of rate policy.

Platinum and palladium fell 0.4% and 2.4%, respectively.

At the New York spot close: gold dipped $1.90 to $2,322.30; silver added 6 cents, to $27.36; platinum slipped $3.80 to $984.60; and palladium shed $23.40 to $956.30 an ounce.

5/7/2024: Gold dips on stronger dollar

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold dipped 0.3% to close above $2,324 as a stronger dollar and hawkish comments from a Fed official prompted traders to take profits from yesterday's 1% rise. Silver also slipped 0.3% to finish at $27.30 an ounce.

Minneapolis Fed President Neel Kashkari said today that inflation because has stalled because of strength in the housing market, the Fed might have to keep interest rates high for the rest of the year and possibly even increase them.

The comments came after Monday's dovish comments from Tom Barkin of the Richmond Fed and John Williams of the New York Fed President indicating that rate cuts, not hikes, would be the Fed's next move.

The dollar picked up 0.3% against major rivals, buoyed by Kashkari's statement and a sharply lower yen. A rising dollar pressure gold and other commodities by making them pricier in other currencies, limiting overseas demand.

Gold's retreat was backstopped by lower 10-year Treasury yields, which fell to a four-week low as last week's soft jobs and GDP data caused Fed fund futures traders to increase their bets that the Fed will cut rates by nearly 50 basis points this year.

Platinum rose 2.4% while palladium slid 0.4%.

At the New York spot close: gold dipped $7 to $2,324.20; silver slipped 7 cents to $27.30; platinum picked up $23.50 to $988.40; and palladium shed $3.50 to $979.70 an ounce.

5/6/2024: Gold jumps on rate-cut hopes

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold jumped 1% to close above $2,331 after soft data and dovish comments from Fed officials lifted rate-cut hopes, pressuring Treasury yields. Silver surged 3.5% to finish at $27,37 an ounce.

Friday's nonfarm payrolls report showed merely 175,000 jobs were added in April, the fewest in six months, while wages grew at the slowest pace in three years. Separately, the US services sector, which employs most Americans, fell into contraction for the first time since December 2022.

Meanwhile, after sticky inflation reports had prompted worries that the Fed may raise interest rates again, prominent Fed officials have stepped forward to reassure the markets that a rate cut, not a hike, will be the Fed's next move.

Tom Barkin of the Richmond Fed said today the economy is likely to slow in the coming months, putting downward pressure on inflation. New York Fed President John Williams said rates are good where they are and cuts are coming "eventually."

Benchmark 10-year Treasury yields retreated under 4.5% as traders speculated that soft data is likely to result in two rate cuts this year. Falling yields lift gold by decreasing the opportunity costs for holding it instead of bonds.

Rekindled Middle East uncertainty also supported the gold price. Israel is reported all but certain to invade Rafah in Gaza, raising concerns over the potential for retaliatory measures from Iran.

Platinum was nearly flat, inching down less than 0.1%, while palladium climbed 3.7%.

At the New York spot close: gold gained $22.60 to $23,331.20; silver rallied 92 cents to $27.37; platinum dipped 40 cents to $964.90; and palladium advanced $34.80 to $983.20 an ounce.