Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold edged up 0.1% to close above $1,966 as the dollar fell on slowing US factory production and expectations the Federal Reserve will emphasize easy money at its meeting on policy, which starts today.

Industrial output cooled in August, according to Fed reports, rising 0.4% as the effects of COVID-19 and the expiration of fiscal stimulus took their toll. It was the fourth month of progressively smaller gains since the lockdowns were first lifted in May.

Manufacturing expanded 1%, according to the same report, after rebounding by 6.1% in June and 3.5% in July. The index remains 7.3% below pre-pandemic levels.

Separately, the Empire State Fed region's index of business conditions rose by more than expected this month, adding a bright spot to an overall picture of slowing momentum. New orders climbed out of contraction while inventories remained in negative territory.

The Federal Reserve began its two-day meeting on monetary policy, the first since Fed Chair Jerome Powell announced the new framework of inflation averaging at the virtual Jackson Hole meeting of global central bankers last month. This revised approach will let inflation run above 2% for extended periods to promote job growth, effectively keeping interest rates lower for longer.

The dollar fell 0.3% on expectations that the Fed will affirm its pledge to keep rates near zero until well into 2023. Lower rates undermine the dollar by encouraging Forex traders to shift to other currencies that produce higher yield. A weaker dollar, in turn, supports gold and other commodities priced in it for global trade by making them less expensive overseas.

The other precious metals were also higher, with silver adding 0.4% while platinum and palladium rose 2.5% and 3.9%, respectively.

At the Comex close: December gold picked up $2.50 to $1,966.20; December silver added 11 cents, to $27.46; October platinum rose $23.50 to $982.20; and December jumped $90.10 to $2,414.50 an ounce.