Gold News & Info

Source: Bill Musgrave, American Gold Exchange

Austin— Gold finished virtually unchanged above $1,279, holding all of January's 8% gain, as traders weighed softer data in the U.S. and China against recent signals that the Fed intends to raise rates by mid-year.

Consumer spending fell sharply in December, posting its biggest monthly decline since late 2009. Business spending was also the weakest in five years. Manufacturing in the U.S. expanded in December at the slowest pace in a year, according to the ISM, a sign that slowing global growth is taking its toll on American factories. And Chinese manufacturing contracted in January for the second straight month, according to the HSBC China PMI.

If it continues, the weaker data may induce the Federal Reserve to delay its first rate increase until later in 2015 or perhaps 2016, which would benefit gold by holding down the dollar. A rising dollar tends to pressure gold and other commodities denominated in it for international trade by making them more expensive to users of other currencies.

However, the central bank's recent policy statement, released last week, suggests no intention at this point to delay tightening beyond mid-2015, citing "solid" economic expansion and "strong" job gains. Of course, the Fed also promised to be "patient," recognizing the potential drag on U.S. growth of slowing growth in Europe and Asia.

Hedges funds are now at their most bullish toward gold in two years, raising net-long positions by 80% in January, primarily because of expectations that weaker global growth will affect the U.S. and prompt the Fed to hold rates near zero for longer. Gold-backed ETFs surged last month, enjoying their highest inflows of cash in more than two years, for the same reasons.

The other precious were mostly higher. Silver rallied 2.6% and palladium rose 1.9% while platinum slipped 0.5%.

At the Coemx close: April gold ended flat at $1,279.20; March silver rallied 43 cents to $17.21; April platinum slipped $6.70 to $1,231.50; and March palladium rose $15.05 to $787.45 an ounce.