Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.2% to close near $1,637 as the dollar pulled back on soft US data and a rally in the UK pound, while signals from a prominent Fed official suggested the possibility of a dovish turn in rate policy.

The Conference Board's index of leading economic indicators dropped 0.3% in September, extending a trend of weakness that began last spring. A gauge of 10 indicators of the health of the economy, the LEI has fallen in seven of the past nine months, signaling that "a recession is increasingly likely before yearend," according to the report.

Existing home sales fell 1.5% in September to the lowest level since May 2020, during the height of the pandemic. It was the eighth straight month of declines, the longest streak since 2007. The number of units sold fell by 25% year-over year.

The slowdown in the crucial housing market is directly tied to rapidly rising mortgage rates, according to Freddie Mac. The 30-year rate is now just under 7%, the highest in 20 years.

The dollar pulled back as the UK pound rallied after Liz Truss resigned as PM, under fire for her controversial plan to finance tax cuts on high earners via additional national debt. A falling dollar supports gold and other commodities by making them less expensive in other currencies, lifting overseas demand.

Comments from St Louis Fed president James Bullard also lent a modicum of support to gold. Bullard told Bloomberg TV that the central bank can lower inflation without damaging the strong labor market, and that inflation will begin to recede in early 2023. Traders took his words as suggesting that peak rates might be near at hand.

The other precious were also higher, with silver rising 1.8% while platinum picked up 3.9% and palladium climbed 4.2%

At the Comex close: December gold gained $2.60 to $1,636.80; December silver 33 cents to $18.69; January platinum picked up $34 to $915.10; and December palladium added $84.10, to $2,079.60 an ounce.