Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold edged down 0.2% to close under $1,774 on profit-taking despite falling bonds yields and softer wholesale inflation. The metal rose by nearly 6% to a three-month high over the past week as traders recalibrate their rate-hike expectations because of falling inflation.

The Producer Price index rose just 0.2% in October, half of most forecasts, to pull the 12-month wholesale inflation rate down to 8% from 8.4% in September. It was the fourth straight softer print and well-under the 11.7% peak from March.

The so-called core PPI, excluding volatile food and energy costs, also rose 0.2%, dropping the 12-month rate to 5.4% from 5.6% the month before.

Following last Friday's cooler-than-expected CPI, the falling PPI reinforces the narrative that peak inflation has passed, allowing the Fed to go slower with interest rate increases in coming months. Bond yields and the dollar have retreated in recent sessions on hopes for a dovish Fed, while gold and silver have soared.

Benchmark 10-year Treasury yields extended their slide to under 3.8% after today's PPI report, supporting gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar dipped another 0.1% against major rivals, slipping to a new three-month low and further backstopping gold's minor correction.

The other precious metals were mixed with silver and platinum dropping 1.2% and 0.2%, respectively, while palladium picked up 1.7%.

At the Comex close: December gold prices dipped $3.20 to $1,773.70; December silver slid 27 cents to $21.84; January platinum prices slipped $2.30 to $1,030.70; and December palladium climbed $34.50 to $2,074 an ounce.