Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold dipped 0.2% but held above $1,201 as support from a weaker dollar was offset by plunging oil prices, tempering demand for inflation hedges.

Oil prices fell to the lowest of the year as West Texas Intermediate crude plunged 8% for its twelfth straight losing session, the longest on record. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The recent decision by the Trump administration to exempt eight nations, including major-consumer China, from sanctions against Iran is leading to unexpected oversupply. Saudi Arabia and other major suppliers had already ramped up production to offset the loss of Iranian oil from the global market.

The dollar fell 0.4% against major rivals, stemming gold's losses, on news that a Brexit agreement is near at hand. British PM Theresa May announced talks with the EU are in the "endgame," driving the UK pound more than 0.8% against the buck. A weaker dollar supports gold by making it less expensive overseas.

The US budget deficit widened to $100 billion in October, up from $63 billion one year ago, as spending accelerated by 18% while receipts grew by 7%. October is the first month of the government's new fiscal year. Fiscal year 2017 accrued a deficit of $782 billion, while the CBO forecasts $981 billion for 2018.

The other precious metals were mostly lower, with silver and platinum dropping 0.2% and 0.5%, respectively, while palladium added 0.6%.

At the Comex close: December gold dipped $2.10 to $1,201.40; December silver slipped 3 cents to $13.98; January platinum lost $4 to $841.30; and December palladium picked up $6.50 to $1,092.10 an ounce.