Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold edged up 0.1% to close near $1,752 as new concerns about Chinese developer Evergrande and China's crackdown on cryptocurrenices overcame higher bond yields to lift demand for alternative assets. The metal finished the volatile week with a 30-cent gain.

China's second-largest property developer, Evergrande reportedly missed a huge debt payment yesterday, putting it closer to default within 30 days and raising again the specter of global debt contagion. China has apparently decided not to bail out the firm but simply try to contain the fallout for its economy.

A key player in China's heavily leveraged real-estate sector, which constitutes nearly 30% of its economy, Evergrande carries some $300 billion in debt owned by major financial companies around the world.

Gold jumped 1.4% over two sessions earlier in the week on Evergrande concerns, only to surrender most of those gains after the Fed, following its two-day policy meeting, signaled that it may start withdrawing monetary stimulus in the near future, perhaps as early as November.

Separately, China reiterated its intention to clamp down on virtual currency speculation, declaring that it does not have the same legal status as legal currency. Bitcoin and Ether, two top digital currencies, fell sharply after being singled out by China avowed crackdown.

The move was seen as an attempt to support China's pilot program for a digital yuan, which will be controlled by the PBOC and face direct competition from other crypto currencies.

Benchmark 10-year Treasury yields rose above 1.45% as bond traders digested the likelihood that the Fed will begin to reduce quantitative easing this fall. Higher yields create a headwind for gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The other precious metals were lower for the session and mixed for the week. Silver dropped 1.1% today but added 0.4% this week. Platinum dropped 1.7% but still gained 5% this week. Palladium dropped 1.1% on the day and 1.6% on the week.

At the Comex close: December gold added $1.90, to $1,751.70; December silver dropped 25 cents to $22.425; October platinum shed $17.10 to $979.90; and December palladium slid $20.70 to $1,951.10 an ounce.