Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold fell 1.7% to close under $1,796 after US data suggested resilience in the economy that could support further monetary tightening, rallying the dollar and undercutting alternative store of value.

The economy grew by an annualized 3.2% in the third quarter, more than previous reported, as the on strong consumer spending. Separately, initial job less claims grew by less than expected, indicating underlying strength in the labor market.

The dollar rose 0.4% against major rivals as traders speculated that the upbeat data could encourage the Fed to continue its aggressive interest rate hikes in 2023. After increasing its benchmark rate from near zero to 4.25% this year, the Fed projects at least an additional 75 basis points of hikes next year.

Higher interest rates lift the dollar by making it more attractive to Forex investors seeking higher yield. A stronger dollar pressures gold in turn by making it more expensive in other currencies.

Not all today's data was positive, however. The Conference Board's index of leading economic indicators tumbled 1% in November for its ninth straight monthly decline. The LEI is a gauge of 10 metrics that signal whether the economy is getting better or worse.

Wall Street retreated on worries that further rate hikes could increase the odds of recession. The Dow dropped 1%, the S&P 500 1.5%, and the Nasdaq 2.2%.

The other precious metals were mostly lower, with the silver and platinum shedding 2.4% and 1.7%, respectively, palladium added 0.3%.

At the Comex close: February gold fell $30.10 to $1795.30; March silver lost 57 cents to $23.62; January platinum slid $17.40 to $984.60; and March palladium picked up $5.60 to $1,672.40 an ounce.