Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold dropped 0.9% to close under $1,920 as Treasury yields and the dollar continued to rise on interest rate worries despite softer US economic data. It was the metal's second straight day of losses.

Consumer confidence fell to a four-month low this month as Americans registered anxiety about rising interest rates, inflation, and the looming government shutdown. The Conference Board gauge looking six months into the future fell under 74, where anything under 80 anticipates recession.

US new home sales fell 8.7% in August under pressure from a combination of higher mortgage rats and limited inventory. Many would-be sellers have decided to keep their lower-rate mortgages by staying in their homes.

Despite the downbeat data, benchmark 10-year Treasury yields climbed to a new 16-year high above 4.55% on worries that the Fed is not done raising interest rates after all. Rising yields pressure gold by increasing the opportunity cost for holding it instead of bonds for safety.

Following last week's hawkish messaging from the Fed after its two-day policy meeting, several regional Fed officials have reinforced the mantra that rates need to go higher and stay there for longer.

The Minneapolis Fed's Neel Kashkari and the Chicago Fed's Austan Goolsbee added their voices to the choir today, with the latter saying the risk of inflation above 2% outweighs the risk of recession.

The dollar also rose, pressuring gold and other commodities by making them more expensive in other currencies, suppressing overseas demand.

The other precious metals were also lower, with silver sliding 0.8% while platinum and palladium dropped 1.1% and 0.5%, respectively.

At the Comex close: December gold fell $16.80 to $1919.80; December silver slid 19 cents to $23.20; October platinum, still the most-active contract, lost $10.40 to $907.10; and December palladium shed $6.30 to $1,225.70 an ounce.