Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold edged up for a second session, adding 0.1% to close at $1,088.50, as bargain-hunters buoyed the market despite a higher dollar.

The dollar rose to a seven-month high today on momentum from last Friday's strong nonfarm payrolls report, which showed the U.S. adding 271,000 jobs in October, far more than forecast. The buck is now up nearly 17% since June 2014 against a basket of major rivals.

After two straight months of mediocre gains, the robust employment data raised expectations that the FOMC may raise interest rates in December. The CME FedWatch tool, which tracks trading in Fed fund futures, now puts the probability of a December hike at 68%, up from just 7% a month ago.

Higher rates strengthen the dollar by attracting foreign exchange inflows. A stronger dollar typically weighs on gold and other commodities denominated in it for international trade by making them more expensive to users of other currencies.

Adding to the dollar's gains were comments from Boston Fed President Eric Rosengren, who said late yesterday that a December rate hike could be appropriate, provided the economy continues to improve. Rosengren becomes a voting member of the Fed in January.

The BLS reported today that import prices declined 0.5% in October after falling 0.6% in September, and export prices also fell. Prices for imported goods have now fallen in 14 of the past 16 months, weighing on consumer inflation, as oil prices have declined and the dollar has strengthened.

The other precious metals were mostly lower, with silver and platinum sliding 0.5% and 1.6%, respectively, while outlier palladium inched up 0.1%.

At the Comex close: December gold gained 40 cents to $1,088.50; December silver slid nearly 6 cents $14.36; January platinum lost $14.90 to $899.50; and December palladium inched up 85 cents to $597.80 an ounce.