Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinWith most US markets closed for the MLK holiday, spot gold rose 0.4% to close above $2,054 on carryover from Friday’s 1.6% rally, driven by falling wholesale inflation and rising concerns about the Middle East.

The producer price index for final demand decreased 0.1% in December, the government reported on Friday. It was the third straight month of wholesale disinflation, signaling lower consumer prices are probably in the pipeline.

The falling PPI blunted the effect of a slight uptick in the CPI for December, prompting the markets to increase bets on lower interest rates. Fed funds futures traders now project odds of nearly 80% that the Fed will cut by a quarter-point at the March meeting.

Lower interest rates tend to lift gold by reducing Treasury yields and the dollar, making it more attractive an alternative store of value.

Data drops this week, including consumer spending and the Fed’s Beige Book, may provide further clarity on rate policy.

Concern about an expanding war in the Middle East is also supporting the metal after combined forces of the US and UK launched a dozen air strikes against Iran-backed Houthi militants late last week in retaliation for months of attacks on international shipping in the Red Sea.

The other precious metals were mixed, with silver adding 0.3% while platinum and palladium lost 0.5% and 0.1%, respecti8vleyl.

At the New York spot close: gold gained $7.67 to $2,054.37; silver picked up 6 cents to $23.23; platinum shed $4.60 to $916.51; and palladium edged down $1.01 to $977.50 an ounce.