Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Extending Friday's 0.5% rise, gold surged another 1.3% to close above $1,315 as the dollar faltered further, boosting demand for alternative stories of value. It was the metal's highest close in almost 11 months.

The dollar slumped to an 11-month low against a basket of major rivals while the euro jumped above the psychologically-important $1.20 level for the first time since January 2015. The moves came as traders digested speeches from Janet Yellen and Mario Draghi at last week's meeting of global central bakers at Jackson Hole.

Fed Chair Yellen gave no real clues about the direction of US monetary policy in her speech on Friday, something traders took to suggest a wavering commitment to raising interest rates again this year. Persistently low inflation and wobbly economic data has created some push-back among Fed members against the need for higher rates, as evident in the minutes from the July meeting and recent speeches.

ECB chief Draghi, who also spoke on Friday, was widely expected to talk-down recent strength in the euro. Instead, he signaled that eurozone monetary stimulus could be curtailed soon because of the strengthening economic outlook for the region.

The euro has now gained nearly 14% against the dollar this year, a trend that is likely to continue if the Fed stands pat and the ECB rolls back stimulus. Gold often trades in sympathy with the euro because both benefit from a weakening dollar.

Gold also received some safe-haven bids in response to disastrous rainfall and flooding in Texas and Louisiana because of Hurricane Harvey.

The other precious metals also rose, with silver gaining 2.3% while platinum and palladium added 1% and 0.6%, respectively.

At the Comex close: December gold surged $17.40 to $1,315.30; December silver climbed 40 cents to $17.53; October platinum added $10.20, to $989.30; and December palladium picked up $5.90 to $932.35 an ounce.