AGE Daily Gold Update

AGE Daily Gold Update presents a recap on today's action in the precious metals markets. View archives.

12/13/2024: Gold gains 0.6% for the week

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold slid 1.2% to close under $2,656 as yields and the dollar edged higher, prompting traders to take profts from yesterday’s climb to a five-week high of $2,687.50. Bullion still gained 0.6% for the week on rising expectations for a rate-cut from the Fed this month. Silver lost 1.9% today and 1.7% this week to finish at $30.66 an ounce.

Wholesale inflation rose 0.4% in November, as evident in yesterday's release of the producer price index, pushing the 12-month rate up to 3% from 2.6%. But most of that increase came from the cost of eggs while the cost of services, which had been stubbornly high, eased substantially. With little evidence of further inflation in the pipeline, economists have sharply lowered their estimates for the upcoming PCE index, the Fed’s preferred inflation gauge.

Following a modest CPI release the day before, the PPI print increased the likelihood that the Fed will reduce interest rates by another quarter-point when it meets next week. Fed fund futures now the odds at 97%, up from 78% just one week ago.

But the recent buoyancy of inflation has also led to a damping of rate-cut expectation for 2025. The odds of another cut in January have fallen to just 23%, with most market participants forecasting March as the earliest Fed meeting for the next reduction. Uncertainty about the extent and effect of President-elect Trump’s aggressive tariff proposals are also factors.

Benchmark 10-year Treasury yields and the dollar both edged higher as traders digested the possibility of a slower unwinding of interest rates next year. Higher yields weigh on gold by incrasing the opportunity cost for holding it instead of bonds. A stronger dollar makes gold and other commodities more expensive in other currencies, inhibiting demand overseas.

Platinum dropped 1.4% today and 0.5% this week. Palladium fell 2.7% for the session and 0.7% for the week.

At the New York spot close: gold fell $31.50 to $2,656; silver shed 58 cents to $30.66; platinum slid $13.10 to $923.55; and palladium dropped $26.40 to $956.60 an ounce.