Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.6% to close at $1,828, a fresh two-month high, as a weaker dollar and concerns about persistent inflation lifted alternative stores of value. It was the metal's third straight winning session.

The dollar fell from 0.3% after hitting a 15-month high on Friday as investors responded to relatively dovish signals from central banks suggesting that inflation is likely to continue unchecked. A falling dollar supports gold and other commodities by making them less expensive in other currencies, supporting overseas demand.

The Fed said last week that it will begin tapering quantitative easing in coming months, as expected. At the same time, Fed Chair Jerome Powell said talk of raising rates is premature, and inflation is likely to moderate by mid-2022.

Separately, ECB chief economist Philip Lane said Eurozone inflation should also ease next year and the Bank of England held interest rates unchanged. The ongoing easy-money policies of the major central banks weigh on their currencies and support gold as a hedge against inflation.

A couple of Fed members pushed back on the dovish leaning of last week's message. Vice Chair Richard Clarida and St Louis Fed chief James Bullard both suggested the central bank could raise next year if the labor market heals and inflation proves intransigent.

Their statements had little effect on markets because, like the Fed taper, a rate hike next year has essentially been priced in.

The Dow rose to 0.3% to new record high, led by industrials and materials shares, after the Biden Administration passed of its $1 trillion infrastructure program late Friday. The massive building program also supported commodities, helping to lift gold.

The other precious metals were also higher, with silver rising 1.6% while platinum and palladium picked up 2.3% and 2.5%, respectively.

At the Comex close: December gold gained $11.20 to $1,828; December silver surged 39 cents to $24.54; January platinum picked $24.20 to $1,060; and December palladium climbed $50.10 to $2,077.70 an ounce.