Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.6% to close near $1,650 on bargain-hunting as mixed US data pressured the dollar ahead of tomorrow's decision on interest rates from the Federal Reserve. The metal had slipped 1.8% over the previous three sessions on rallies in yields and the dollar.

Growth in US manufacturing ground almost to a halt in October, with the closely watched ISM index falling to 50.2, where any reading under 50 indicates contraction. Only eight of 18 major industries reported growth as demand weakens in the US and overseas.

Separately, the Labor Department reported that jobs openings unexpectedly rose in September, signaling that the labor market remains tight despite sharply higher interest rates.

The Fed is widely expected to raise rate by another whopping 75 basis points at tomorrow's conclusion of its two-day meeting on policy, hoping in part to loosen the job market as a way to reduce the strongest inflation in 40 years.

Whether the central bank gears down in December is an open question. Fed funds futures trading is almost evenly split between an unprecedented fifth hike of 75 basis points or a smaller one of 50.

The smaller December hike of 50 basis points was considered more likely until GDP came in stronger than expected in Q3 and inflation remained unchanged in last week's release of the PCE index, the Fed's preferred gauge.

Benchmark 10-year Treasury yields were little-changed. The dollar edged down 0.1% against major rivals, buoying gold and other commodities by making them less expensive in other currencies.

The World Gold Council reported global gold demand rose 28% in Q3 to post a year-to-date increase of 18%. Demand for physical coins and bars led the way, jumping 36% as investors sought shelter from global inflation.

The other precious metals were also higher, with silver rising 2.9% while platinum and palladium climbed 2.2% and 2.5%, respectively.

At the Comex close: December gold gained $9 to $1,649.70; December silver added 55 cents, to $19.67; January platinum picked up $20.40 to $950.50; and December palladium climbed $45.30 to $1,877 an ounce.