Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.3% to close above $1,946 after softer US data pressured Treasury yields and lifted safe-haven assets despite a stronger dollar. Despite dropping 1.4% yesterday on an unexpectedly hawkish rate view from the Fed, the metal ended the week virtually flat.

The S&P flash services-sector index fell to an eight-month low in September, barely holding above contraction as the US economy slowed late in the summer. A similar index for manufacturing rose slightly but remained firmly in contraction. Most Americans are employed in service industries like healthcare, hospitality, and retail.

Meanwhile, economic activity in France and the UK slowed more than expected and the entire Eurozone economy is likely to have contracted in the third quarter.

Benchmark 10-year Treasury yields retreated slightly on the down data, lifting gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Nonetheless, yields remain near 16-year highs after the Fed's updated dot plot, released Wednesday, forecasts another quarter-point rate increase this year and only a half-point cut in 2024, down from 1%.

Several Fed officials fed the higher-for-longer narrative about interest rates today. Fed Governor Michelle Bowman, a noted hawk, said rates will likely need to increase further to quell inflation. Boston Fed President Susan Collins and San Francisco Fed President Mary Daly were somewhat less certain, saying they remain worried about inflation but adding the central bank should exercise patience.

The dollar rose 0.2% for the day and 0.3% for the week on the rate view and relatively stronger economic position of the US versus Europe. It was the buck's tenth straight week of gains, the longest streak in nearly 10 years. A stronger dollar is a headwind for gold and other commodities because it makes them pricier in other currencies.

The other precious metals were mixed for the day and higher for the week. Silver added 0.7% for a weekly rise of 2%. Platinum picked up 1% today and 0.5% this week. Palladium lost 1.1% but still scored a 0.3% weekly win.

At the Comex close: December gold gained $6 to $1,946.20; December silver added 16 cents, to $23.84; October platinum picked up $9.50 to $934.10; and December palladium declined by $13.40 to $1,256 an ounce.