Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold inched up 30 cents to close just under $1,740 after support from falling yields and the a weaker dollar was largely offset by an increase in risk appetite.

US equities gathered steam after mass retailer Best Buy forecast stronger holiday sales than expected, lifting the retail sector. In addition, energy shares jumped after Saudi Arabia refute reports of production increases, saying the OPEC+ producers will stick with announced cuts.

All three major indexes added around 1.2%.

Despite the uptick in risk sentiment, investors sought the safety of government bonds on worries that increased Covid restriction in China will further undermine a weak global economy. Benchmark 10-year Treasury yields pulled back under 3.8%, buoying gold by decreasing the opportunity cost for holding it instead of bonds.

The spread between 2-year and 10-year yields fell to minus 73 basis points, inverting the yield curve between the two by the most since 1982. An inverted curve of this magnitude has historically been considered a reliable predictor of recession.

The dollar tracked yields lower, dropping 0.6% against major rivals. A falling dollar supports gold and other commodities by making them less expensive overseas.

The other precious metals were also higher, with silver adding 0.9% while platinum and palladium picked up 0.8% and 0.2%, respectively.

At the Comex close: December gold edged up 30 cents to $1,739.90; December silver rose 18 cents to 21.05; January platinum picked up $7.80 to $995.70; and December palladium climbed $4.50 to $1,857.50 an ounce.