Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold rebounded 0.9% to close at $1,664 as yields and the dollar retreated after the UK reversed itself on unfunded tax cuts, buoying alternative assets. The metal 3.5% slid last week as higher inflation readings increased the likelihood of more aggressive rate hikes from the Fed.

The new British Chancellor Exchequer, Jeremy Hunt, threw out most of the controversial $51 billion in tax cuts designed by PM Liz Truss. The radical plan to slash taxes on high earners by increasing national debt while also raising interest rates had destabilized financial markets, causing gilt yields to skyrocket and nearly provoking an implosion of the UK pension fund.

Benchmark 10-year US Treasury yields pulled back, tacking lower with UK gilts. Lower yields support gold by decreasing the opportunity cost for holding it instead of bonds.

The dollar fell more than 1% as the stabilizing move by Britain lifted the pound and euro and decreased demand for the buck as a safe-haven currency. A weaker dollar lifts gold and other commodities by making them less expensive overseas.

New York' Empire State index of manufacturing fell further into contraction in October. It was the third straight month of decreasing activity in this important Fed region, fanning concerns that sharply higher interest rates are sapping strength from the economy.

The other precious metals were also higher, with silver rallying 3.6% while platinum picked up 2.1% and palladium added 0.1%.

At the Comex close: December gold gained $15.10 to $1,664; December silver rose 65 cents to $18.72; January platinum climbed $18.70 to $913.60; and December palladium edged up $2.60 to $1,999.90 an ounce.