Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold held firm, inching up less than 0.1% to close near $1,954, despite a jump in Treasury yields and a stronger dollar as traders await tomorrow's verdict from the Fed on monetary policy. It was the metal's fourth straight higher session.

The Fed is almost certain to hold interest rates steady when it concludes its two-day meeting. Fed fund futures trading posits a 99% certainty of no action, although the odds of another quarter-point hike before December stand at 35%.

But the Fed is also expected to reiterate its now-standard "higher for longer" mantra in its post-meeting policy statement.

While gold traders focused on the prospect of another rate pause, which would support the gold price by keeping yields and the dollar constrained, bond traders latched onto the expectation of hawkish messaging because of stronger US data and higher recent inflation reports.

Benchmark 10-year Treasury yields jumped to nearly 4.4%, the highest level in close to 16 years, behind concerns that skyrocketing oil prices will continue to lift consumer and wholesale inflation. Higher bond yields are a headwind for gold because they increase the opportunity cost for holding it instead of bonds.

WTI crude rose a fresh four-month high above $91.50 today on hopes that an increase in China's industrial output last month may revive global demand. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were mixed, with siler sliding 0.2% while platinum and palladium picked up 1.1% and 1.8%, respectively.

At the Comex close: December gold added 30 cents, to $1,953.70; December silver dipped 4 cents $23.46; October platinum climbed $10.10 to $948.40; and December palladium advanced $22.50 to $1,266.50 an ounce.