Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.6% to close above $1,875 as dovish comments from Fed officials and flights to because of the Middle East conflict pressured Treasury yields and boosting alternative stores of value.

Atlanta Fed President Raphael Bostic said today that no further interest rate increases will be needed to bring inflation back toward the Fed’s target 2%. The dramatic upsurge of Treasury yields to 16-year highs, along with previous rate hikes, should suffice to slow the economy into a soft landing.

Bostic’s comments echoed several other Fed members in the past two days, including Minneapolis Federal Reserve Bank President Neel Kashkari, Fed Vice Chair Philip Jefferson, and Dallas Fed President Lorie Logan.

Fed fund futures traders now see merely a 10% chance of a rate hike in November, increasing to 30% in December.

Benchmark 10-year Treasury yields dropped sharply to 4.6%, around a two-week low, on the combination of dovish Fed talk and flights to safety in government bonds driven by the turmoil in the Middle East. Falling yields boost gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Tracking lower with yields, the dollar fell 0.3% against major rivals, lifting gold and other commodities by making them less expensive in other currencies, boosting overseas demand.

The other precious metals were also higher, with silver climbing 1.3% while platinum and palladium rose 0.2% and 3.3%, respectively.

At the Comex close: December gold gained $11 to $1,875.30; December silver added 29 cents, to $21.95; January platinum picked up $1.40 to $890.20; and December palladium jumped $39.50 to $1,171.40 an ounce.