Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.2% to close above $1,202 as sharply higher oil prices and concerns about US-China trade supported demand for alternative stores of value.

Oil jumped 2.7% to approach $70 per barrel on falling exports from Iran and forecasts that US production will grow more slowly next year. Sanctions against Iran by the US, imposed after pulling out of the nuclear power pact, are beginning to take their toll as South Korea, Japan, and India have taken fallen into line, shifting their purchases to other OPEC suppliers.

In addition, the EIA lowered its forecast for US production by 15% in 2019, and current US crude inventories fell for the fourth consecutive week. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

China told the World Trade Organization today that it plans to impose $7 billion a year in sanctions on the US for failure to comply with WTO rulings that the US acted unlawfully in creating trade barriers in recent years. The move signals a further deterioration in trade relations between the world's two largest economies, already strained by tit-for-tat tariff escalation.

The dollar traded virtually flat, pressured by a rallying UK pound but buoyed by safe-haven inflows among traders fearful of a deepening trade war with China. Optimism over a possible agreement between EU and UK negotiators over Brexit conditions has supported the pound in recent sessions.

The other precious metals finished lower, with silver dropping 0.2% while platinum and palladium slid 0.1% and 0.3%, respectively.

At the Comex close: December gold gained $2.40 to $1,202.20; December silver dropped 3 cents to $14.15; October platinum dipped 70 cents to $789.30; and December palladium lost $2.80 to $961.80 an ounce.