Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold rebounded 0.7% to close above $1,196, recovering most of yesterday's 1% loss as soft consumer data pulled bargain-hunters into the market despite a higher dollar. The metal still ended the month down 0.9% for its sixth straight monthly loss.

The Personal Consumption Expenditures index fell from 2.3% to 2.2% in August and the core PCE, stripping out volatile food and energy prices, held fast at 2%. At the same time, consumer spending moderated, rising at the slowest pace in six months, and consumer sentiment also cooled. The Atlanta Fed downgraded its forecast for Q3 growth in GDP to 3.6% from 3.8%.

Taken together, the softer consumption data and slowing GDP growth suggested to gold traders that the Fed may not feel pressured to maintain its current pace of four rate hikes per year, despite yesterday's quarter-point increase and its projection of another in December. A slower pace of hikes would undermine the dollar, and a weaker dollar supports gold by making it less expensive in other currencies.

The dollar rose slightly against major rivals as the euro rolled back for another session on fears that Italy's budget turmoil may spill over into the rest of the Eurozone. The anti-establishment Five Star Movement and right-wing League have joined to reject the deficit limits imposed by Italy's EU creditors. The buck has now risen nearly 6% in 2018, driven by rate-differentials with other developed economies and economic weakness in emerging markets.

The other precious metals were higher for the day and month. Silver jumped 3% for a September rise of 1.1%. Platinum added 1% for the day and 3.3% for the month. Palladium added 0.2% for a whopping 10% September surge.

At the Comex close: December gold rebounded by $8.80 to $1,196.20; December silver jumped 42 cents to $14.71; January platinum picked up $7.70 to $822.40; and December palladium added $1.60, to $1,072.80 an ounce.