Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold fell 1% to close under $1,265 as a stronger dollar and pending tax reforms reduced demand for alternative assets despite soft US data. It was the metal's lowest finish in nearly four months.

The dollar rose 0.3% against major rivals, buoyed by speculation that Republican tax reform, if it becomes law, will accelerate inflation and nudge the Fed into more rate hikes. A plunge in the pound also helped after Brexit talks between the UK and EU hit another wall. A stronger dollar tends to weigh on gold and other commodities by making them more expensive overseas.

The buck largely ignored a pair of subpar US economic reports. The trade deficit soared in October to a nine-month high behind higher oil prices and a sharp increase in demand for consumer goods from China, Mexico, and Europe. High trade deficits tend to depress GDP growth, prompting the Atlanta Fed to lower its Q4 forecast to 3.2%.

The ISM services index dropped in November, with declines in new order, production, and employment. Nonetheless, most of the industries tracked in the survey said business was still expanding.

The other precious metals also fell, with silver dropping 1.9% while platinum and palladium lost 0.9% and 1.5%, respectively.

At the Comex close: February gold fell $12.80 to $1,264.90; March silver lost 30 cents to $16.07; January platinum dropped $8.50 to $917.50; and March palladium dumped $14.60 to $977.15 an ounce