Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold gained for a second session, adding another 0.5% to close above $2,023, as bargain hunters returned despite hot inflation data and uncertainty about the timing of rate cuts from the Fed. The metal still lost 0.6% for the week for its second straight weekly slide.

US producer prices rose 0.3% in January, the most in five months and three times the consensus forecast of 0.1%. Year-on-year wholesale inflation increased 0.9%, up from forecasts of 0.6%. The core PPI, less food and energy, rose by a stiffer 0.6% to keep the 12-month rate unchanged at 2.6%.

Following this week’s hotter-than-expected consumer inflation data, the elevated wholesale print suggests higher prices may be with us for longer than expected, potentially delaying the Fed’s plans to pivot toward lower interest rates.

Adding to the rate uncertainty, US consumer sentiment jumped to a 31-month high in early February, according to the University of Michigan survey, on optimism about falling inflation and a still-strong job market.

Except for yesterday’s soft retail sales report, which showed expenditures at US retailers dropping 0.8% in January, most recent data reveal a remarkably resilient US economy, one that is only gradually being slowed by high interest rates.

Benchmark 10-year Treasury yields climbed back above 4.3% as the timing of the Fed's initial rate cut becomes increasingly uncertain. Rising yields pressure gold by increasing the opportunity cost for holding it instead of bonds for safety.

CME FedWatch now puts the odds that rates will remain unchanged through June at nearly 27%, up from less than 8% a week ago and zero a month ago.

Despite pressure from yields and the dollar, gold remains supported by expectations that inflation is on a glide path lower, despite some bumps, and that the Fed will cut rates three times this year.

Safe-haven inflows because of the widening war in the Middle East and strong physical demand in India are also buoying the metal. Gold premiums to a four-month high this week in India, the world’s largest gold consumer, as jewelry dealers stocked up ahead of the traditional wedding season.

Silver climbed 2.3% for a weekly rise of 3.9%. Platinum picked up 0.9% today and 4% this week. Palladium was flat for the session but 9.6% higher for the week.

At the New York spot close: gold gained $9.40 to $2,011.50; silver rose 52 cents to $23.48; platinum added $8.30, to $913.50; and palladium was unchanged at $952.80 an ounce.