Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold rose 0.3% to settle near $1,843 after flat consumer inflation pressured Treasury yields and the dollar, spurring demand for alternative stores of value. It was the metal's fourth straight day of gains.

The Consumer Price Index rose 0.3% in January, the fastest rate in five months, driven by sharply higher fuel and gasoline costs. But underlying inflation remains subdued, with the core CPI, which factors out volatile food and energy costs, holding unchanged for the second straight month.

Treasury yields rolled back on the muted inflation report. When inflation expectations are rising, traders sell long-term bonds, bidding up yields. Falling yields support gold by decreasing the opportunity cost for holding it instead of bond as a safe-haven asset.

The dollar slid against major rivals as traders speculated that flat inflation removes the impetus for the Fed to raise inflation rates. A falling dollar typically lifts gold and other commodities by making them less expensive in other currencies, spurring demand overseas.

In a speech to the Economic Club of New York, Fed Chair Jerome Powell pledged to continue loose monetary policies, which include near-zero interest rates and quantitative easing, to achieve full employment. Monetary easing supports gold prices by devaluing the dollar and increasing the potential for sharply higher inflation down the road.

The other precious metals were also higher, with silver and palladium rising 1.2% and 1.4%, respectively, while platinum jumped 4.4% to a new six-year high on reports of supply deficits.

At the Comex close: April gold gained $5.20 to $1,842.70; March silver dropped 32 cents to $27.08; March platinum climbed $52.50 to $1,246.90; and March palladium added $31.90, to $2,352.50.