Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slid 0.7% to close below $1,855 after strong retail and industrial data boosted equities and the dollar, dulling demand for alternative assets. The metal jumped above $1,879 in intraday trading, the highest level in more than five months, before pulling back on profit-taking.

US retail sales surged 1.7% in October, the fastest pace in seven-months, as consumers got a head start on holiday shopping to avoid possible shortages caused by snarled supply chains. Consumer spending accounts for nearly 70% of GDP.

However, roughly half of the sales increase was attributed to sharply higher prices. Retail sales are calculated in dollars spent. The government reported past week that the CPI increased nearly 1% in October, raising the cost of everything from clothing and electronics to food and gas.

Separately, the Fed reported US industrial output rose 1.6% last month after falling 1.1% in September. Manufacturing rose 1.3% to hit its highest level since March 2019. But roughly half the increase reflected recovery from Hurricane Ida along the Gulf Coast, which caused a 1.1% drop in September.

Wall Street applauded the upbeat data, with all three major indexes rising on hopes for stronger economic growth in Q4. The Dow picked up 0.3% while the S&P 500 and Nasdaq rose 0.5% and 0.8%.

Benchmark 10-year Treasury yields rose above 1.63% as heightened risk appetite caused investors to shift from bonds the stocks.

The dollar picked up another 0.5% to hit a fresh 16-month high as traders speculated that the improving data could lead the Fed a tighten monetary policy more quickly. Also lifting the buck, the euro slumped on rapidly rising Covid cases in the Eurozone. In addition, ECB chief Christine Lagarde said yesterday that raising interest rates to combat inflation would smother the recovery.

A stronger dollar typically weighs on gold and other commodities by making them more expensive in other currencies, depressing demand overseas.

The other precious metals were mostly lower, with silver and platinum dropping 0.6% and 2%, respectively, while palladium added 0.5%.

At the Comex close: December gold dropped $12.50 to $1,854.10; December silver slid 16 cents to $24.94; January platinum fell $22.40 to $1,074.50; and December palladium rose $11.50 to $2,167.60 an ounce.