Daily Gold Update

Source:Matt Warden, American Gold Exchange

AustinGold was nearly flat again today, inching up 0.01% to close just under $1943 as market participant turn their focus towards next week’s US Consumer Price Index report, the last inflation reading before the Federal Reserve’s FOMC announcement later this month. The monetary metal ended down 1.2% for the week, weighed down by a rising dollar and higher US Treasury yields, but a comparatively small drop relative to the fall in the more commodity-linked prices of silver, platinum and palladium.

Comments from several Fed President yesterday were mixed but, across the board, attempted to shift the focus from how high the Fed should raise rates to how long the Fed should maintain higher rates.

Chicago Fed President Goolsbee suggested the Fed is almost done raising rates and said debate should shift to how long to hold rates high rather than how high rates need to go.

New York Fed President Williams stated rates were in a “very good place” but would watch incoming data closely for an inflation resurgence.

Atlanta Fed President Bostic stated monetary policy is “appropriately restrictive” and that the Fed needs to be cautious and patient to reduce interest rates.

Dallas Fed President Logan argued that skipping a rate increase would not imply stopping, and that rates are appropriately positioned but further evaluation of incoming data would be needed to ensure inflation has been extinguished.

Following the speeches, the Fed fund futures markets continued to imply a 93% chance the Fed would skip raising rates later this month, but odds increased from 33% to 43% that the Fed would raise rates at their Nov meeting.

The dollar edged up 0.03% against its major rivals and moved to a 10-month high against the Japanese Yen following a report the Japanese economy grew less than expected. The report is yet another in a string of reports highlighting the divergence in global economies, with the US currently experiencing favorable tailwinds while Europe, China – and now Japan – are running into economic headwinds.

Benchmark 10-year Treasury yields also rose modestly on the day, up 0.015 percentage points to 4.263%.

The other precious metals were down for the day and down hard for the week. Silver slid 0.3% today and 5.7% this week. Platinum dropped 1.6% today and 7.6% for the week. Palladium gave up 1.9% today and 2.9% this week.

At the Comex close: December gold added $0.20 to $1,942.70; December silver lost 7¢ to $23.17; October platinum dropped $14.80 to $894.80; December palladium fell $22.70 to settle at $1,192.30 an ounce.