Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold rose 0.7% to finish near $1,998 as soft US data and a dovish rate view weighed on yields and the dollar, lifting alternative stores of value. It was the metals highest close in more than a year.

US economic growth in the fourth quarter was revised lower again to 2.6%, down from an initial print of 2.9% and an earlier revision to 2.7%. Weaker-than-reported consumer spending, which makes up around 70% of GDP, caused the drag.

Separately, corporate profits tumbled 2% in Q4 for their biggest slide in two years, pressured by rising labor costs and slower business. And initial jobless claims rose to a three-week high of 198,000 last week.

Combined with residual jitters over instability in the banking sector, the soft data reinforced expectations that the Fed will pivot away from the most aggressive rate-hike cycle in a generation. Fed fund futures traders are nearly 50/50 on quarter-point rate hike in early May, with the odds of no further increases thereafter at 100%.

Benchmark 10-year Treasury yields inched down on the data and rate view, supporting gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven.

The dollar fell 0.5% as traders increasingly see a divergence between US and Eurozone rate policies. As the Fed winds down, the ECB is expected to step-up rate hikes, making the euro more attractive. A weaker dollar lifts gold and other commodities by making them less expensive in other currencies.

Rising oil also supported gold as US benchmark WTI crude jumped another 1.9% to a three-week high above $74 on brighter prospects for demand from China. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were also higher, with silver surging 2.2% while platinum picked up 2% and palladium rose 1.8%.

At the Comex close: June gold gained $13.20 to $1,997.70; May silver rose 52 cents to $23.99; July platinum picked up $19.50 to $996.90; and June palladium advanced $26.50 to $1,463.60 an ounce.