Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold fell another 1% to close under $1,848 as yields and the dollar climbed again after a government shutdown was narrowly averted. Falling oil prices and upbeat data also weighed on the metal, which dropped for the sixth straight session.

Congress passed a stopgap funding bill to prevent a partial closure of the government on Saturday after Speaker Kevin McCarthy enlisted support from Democrats, pushing back against a small cadre of hardline partisan in his own party. A shutdown was projected to cost the economy $6 billion a week in lost wages and spending, according to some economists.

The ISM reported business conditions at US factories improved in September for the third straight month, with the index reaching a 10-month high of 49. Still, manufacturing remained in contraction for the eleventh month.

Construction spending rose 0.5% in August, pushing the annual growth rate to 7.4%

Benchmark 10-year Treasury yield jumped to nearly 4.7% on relief about the averted shutdown and the solid data. Rising yields present a headwind to gold because they increase the opportunity cost for holding it instead of bonds as a safe-haven asset.

Tracking higher with yields, the dollar jumped 0.7% to extend its four straight weeks of gains. A stronger dollar pressures gold and other commodities by making them more expensive in other currencies, limiting overseas demand.

Falling oil also hurt gold as US benchmark WTI crude dropped another 2% to a three-week low under $89 per barrel. Gold often trades in sympathy with oil as hedge against energy-related inflation.

The other precious meals were also sharply lower, with silver losing 4.6% while platinum and palladium dropped 3.2% and 4%, respectively.

At the Comex close: December gold fell $18.90 to $1,847.20; December silver shed $1.03 to $21.42; January platinum lost $29.10 to $886.80; and December palladium retreated by $50.10 to $1,205.90 and ounce.