Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold climbed 0.3% to close near $1,732 despite a higher dollar as bargain-hunters swept in after the recent selloff knocked prices 5% lower in two days. It was the metal's first winning session in the past four.

Strong jobs data released Friday and Monday pressured gold to a four-month low yesterday by raising speculation that the Federal Reserve will soon begin to remove the extraordinary monetary stimulus put in place to rescue the economy from pandemic closures last year.

That speculation has been amplified by hawkish comments from some Fed members. Boston Fed chief Eric Rosen said today that the central bank should begin reducing its bond-buying program, known as quantitative easing, sometime this fall. Other Fed officials, including Christopher Waller and James Bullard, have made similar public statements in recent days.

Quantitative easing has supported gold by artificially lowering Treasury yields, reducing the opportunity cost for holding the metal instead of bonds as a safe-haven asset.

While other key officials like Fed Chair Jerome Powell and Fed Governor Lael Brainard have continued to preach patience, especially given the unpredictable path of the delta variant, the bond market has started pricing-in the QE taper. The result has been higher yields and a sharply lower gold price.

Gold's rebound today came despite a rise 0.2% rise in the dollar after the Senate passed President Biden's $1 trillion infrastructure plan. While it still must pass the House, the massive bill would effectively serve as another form of economic stimulus, potentially fueling faster economic growth and higher inflation.

The other precious metals were also higher, with silver adding 0.5% while platinum and palladium rose 1.7% and 1.8%, respectively.

At the Comex close: December gold rose $5.20 to $1,731.70; September silver futures picked up 12 cents to $23.39; October platinum gained $16.10 to 987; and September palladium climbed $47.90 to $2,650 an ounce.