Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold jumped 0.8% to finish near $1,785 as inflation concerns and a weaker dollar boosted demand for alternative stores of value despite a slight uptick in Treasury yields.

Fed Governor Randal Quarles said today that inflation poses "significant upside risks" and should occupy more of the Fed's focus. Adding his support to beginning a taper of the Fed's $120 bullion per month asset purchasing program in November, Quarles is the third Fed Governor in recent weeks to lean publicly in the direction of tighter monetary policy.

The Fed's Beige Book reported the economy slowed to a "modest to moderate" pace of growth last month, with companies in all Fed districts reporting increased pricing pressures, supply shortages, and a difficult labor market. The overall sentiment was still cautiously optimistic about the near-term business conditions.

Solid corporate earnings fuel Wall Street for a third session, with Dow and S7P 500 rising 0.4% while the Nasdaq was little changed.

Benchmark 10-year Treasury yields ticked higher on rising risk appetite and inflation concerns. Bond traders demand higher yields in an inflationary environment as compensation for eroding future purchasing power.

The dollar slipped 0.2% against major rivals as traders focused on commodity-related currencies like the Australian and Canadian dollar. A weaker doll lifts gold and other commodities by making them cheaper overseas.

Gold was also support by sharply higher oil prices. WTI crude rose for the fifth session, adding 1.6% to more than $84 per barrel, after a surprising data from the Energy Information Administration showed crude inventories fell for the first time in a month. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were mostly higher, with silver rand platinum adding 2.4% and 0.5%, respectively, while palladium dropped 0.9%.

At the Comex lose: December gold gained $14.40 to $1,784.90; December silver surged 56 cents to $24.45; January platinum picked up $5.20 to $1,052.30; and December palladium dropped $18.50 to $2,082.40 an ounce.