Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold dipped 0.3% to close under $1,641 as yields and the dollar marched higher ahead of tomorrow's policy meeting of the Federal Reserve. The metal ended October down 1.9% for its seventh consecutive monthly decline, the longest losing streak since 1982.

The Fed is almost universally expected to raise interest by another 75 basis points—its fourth in a row—at this week's two-day meeting, jacking the benchmark rate up 3.75% to 4% from near zero earlier this year.

With the economy flashing recession signals in recent weeks, speculation was rising that the central bank might pivot away from another mega-hike, if not this month, then next. Yields and the dollar receded, and gold rose to a two-week high.

But Thursday's GDP report, which showed the economy growing by 2.6% in Q3 after contracting in both Q1 and Q2, put a damper on such hopes. And the Personal Consumption Expenditures index for September, released on Friday, showed the 12-month inflation rate has not declined, likely putting added pressure on the Fed to stay aggressive.

Benchmark 10-year Treasury yields extended their rebound above 4% on the hawkish rate view, pressuring gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar also rebounded, adding another 0.7% against major rivals after weakening for much of the month on hopes for a Fed pivot. A stronger dollar weighs on gold and other commodities by making them more expensive in other currencies.

The other precious metals were down for the day and mixed for the moth. Silver slipped 0.2% today but added 0.4% in October. Platinum lost 2% for the session but gained 8.3% for the month. Palladium lost 3.5% today and 16.1% this month.

At the Comex close: December gold dipped $4.10 to $1,640.70; December silver slipped 3 cents to $19.12; January platinum dropped $19 to $930.10; and December palladium $65.50 to $1,831.70 an ounce.