Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold edged up less than 0.1% to close near $1,936, consolidating its recent gains, as safe-haven support from the Gaza war outweighed higher yields and strong retail sales data. The metal has risen more than 4% in October behind flights to safety and a dovish Fed outlook.

US retail sales jumped 0.7% in September, beating forecasts, as Americans spent more on autos, gasoline, and dining out. Online sales for goods also increased thanks in part to an Amazon Prime Day promotion.

Other data was more mixed. Industrial production ticked higher in September but was revised lower in August. Homebuilder confidence fell for the third straight month to its lowest level since January.

Benchmark 10-year Treasury yields pushed above 4.85% to a new 16-year high after the strong retail sales report as traders speculated that the Fed could hike interest rates again this year after all. Fed fund futures trading puts the odds of a November increase at 10%, up from 5% before the print, and a December hike at 40%, up from 33% yesterday.

Richmond Fed President Tom Barkin pushed back on the narrative that the stronger retail data mean the economy is heating up. In a DC speech, Barkin said demand “is softening” within the economy and weaker demand is already bringing down inflation.

Barkin is one of many regional Fed officials who have come out recently with statements suggesting that the Fed is finished with this tightening cycle.

Adding to the selloff in bonds, President Biden’s trip to Israel on Wednesday raised hopes that a wider regional conflict might be prevented. However, continuing inflows into precious show that demand for safe-haven assets remains strong and is likely to increase if the Gaza war intensifies.

The other precious metals were mostly higher, with silver rising 1.1% and platinum adding 0.8% while palladium was virtually unchanged.

At the Comex close: December gold added $1.40 to $1,935.70; December silver climbed 26 cents to $23.02; January platinum picked up $6.80 to $906.20; and December palladium dipped a dime to $1,146.70 an ounce.