Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold jumped 1.1% to close above $1,823 after China further eased Covid restrictions, setting the stage for increased demand in the world's second-biggest economy. The metal rose to just under $1,849 in intraday trading, the highest level since last June.

After draconian measures that stoked massive protests and paralyzed its economy for months, China announced additional changes in its Covid policies that will boost growth and ease of movement. Visitors from abroad will no longer have to enter quarantine, and regulations for managing new cases have been downgraded.

The smothering of the Chinese economy by its zero-Covid policies has weighed on global gold demand, as China is the world's leading consumer of the metal for jewelry, investment, and industry. Traders are optimistic that renewed purchases will buoy the global gold price in 2023.

The dollar slipped 0.2% against major rivals including the yuan and euro on the news, supporting gold and other commodities by making them less expensive in other currencies.

Falling inflation also fueled the metal's rise. Data released on Friday showed the personal consumption index, or PCE, rose just 0.1% in November. The annual rate fell from 6.1% to 5.5%, the lowest level since October 2021. The PCE is the Fed's preferred inflation gauge.

While gold is often ought as a hedge against inflation, higher interest rates—the Fed's main toll for lowering inflation–are a headwind. Higher rates mean higher bond yields, which increase the opportunity cost for holding gold instead of bonds as a safe-haven asset. Falling inflation supports gold by raising expectations of slower or even falling interest rates.

The other precious metals were mostly higher, with silver and palladium rising 1.2% and 5.4%, respectively, while platinum edged down less than 0.1%.

At the Comex close: February gold gained $18.90 to $1,823.10; March silver added 30 cents, to $24.22; April platinum dipped a dime to $1,029.70; and March palladium picked up $94.30 to $1,826.30 an ounce.