Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold jumped 1.8% to close at $1,702 as the dollar and Treasury yields retreated on weak US manufacturing data, worries about Credit Suisse contagion, and the jettisoning of controversial UK tax plans. Silver rocketed 8.1% higher for its biggest day in 20 months.

The ISM reported US manufacturing grew at its lowest rate in 30 months, with new orders and employment both contracting under pressure from rising interest rates and falling demand. The survey's manufacturing PMI dropped to 50.9, barely above contraction, for the lowest print since May 2020 during pandemic closures.

Credit Suisse, one Europe's largest investment banks, saw shares tumble again as worries grow about its potential insolvency. While its peers have posted profits, Credit Suisse has been losing money for the past three quarters. The bank's credit default swaps, which are effectively bets on whether it will survive, widened to the most since 2009, reviving fears of financial contagion.

Benchmark 10-year US Treasury yields fell sharply to 3.65% as investors shifted in safe havens like government bonds and gold. Falling yields support gold by lowering the opportunity cost for holding it instead bonds.

In an abrupt volt-face, Britain has decided it will not cut taxes on its highest earners in a desperate and ill-conceived attempt to stimulate its economy. The debt-financed tax cuts, which were to occur concurrently with rate hikes, roiled global markets when announced last week by new Conservative PM Liz Truss.

The dollar fell 0.5% against major rivals as the UK pound rallied on the change in taxation plans. A weaker dollar lifts gold and other commodities by making them less expensive in other currencies.

The other precious metals were also strongly higher, with platinum adding 4.8% while palladium picked up 2.3%.

At the Comex close: December gold gained $30 to $1,702; December silver surged $1.55 to $20.59; January platinum rose $41 to $900.10; and December palladium picked up $50 to $2,232.20 an ounce.