Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold jumped 1.2% to close above $1,656 as yields and the dollar fell on signals that the Fed may slow its aggressive rate-hike regimen after November. The metal picked up 0.5% for the week.

Speaking at UC Berkeley, Francisco Fed President Mary Daly said today that the Fed needs to start talking about slowing the pace of rate hikes in coming months.

Daly's comments come one day after St Louis Fed president James Bullard suggested that monetary policy can be tweaked to prevent damage to the labor market, which traders took as a dovish signal.

And separately, the Wall Street Journal reported today that a heated debate is underway within the Fed about how much more to increase interest rates.

The central bank has already raised its benchmark funds rate by 300 basis points since March, one of the fastest changes in history. This includes three consecutive jumps of 75 basis points, which is almost unheard of, stoking concerns that the economy will be pushed into recession.

While another 75-point hike is a near-certainty at the November meeting of the FOMC, speculation is growing that the Fed will gear down in December and Q1 of 2023.

Wall Street rejoiced on the potentially dovish inflection, with all three major US indexes adding around 2%. Meanwhile, benchmark 10-year yields retreated, supporting gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar dropped 0.6% against major rivals led by the yen, which rallied hard on expectations that the Bank of Japan will intervene this weekend to support the currencies. A falling dollar buoys gold and other commodities by making them less expensive in other currencies.

Also helping gold, physical demand in India picked up on the lower prices and coming festival season. Gold is a considered an auspicious purchase during the important festival of Diwali, which begins in three days.

The other precious metals were mixed for the day and higher for the week. Silver climbed another 2% for a weekly rise of 5.5%. Platinum added 2.1% today and 4.4% this week. Palladium dropped 3.6% on the session but rose 5.5% on the week.

At the Comex close: December gold jumped $19.50 to $1,656.30; December silver added 38 cents, to $19.07; January platinum picked up $18.80 to $933.90; and December palladium fell $74.10 to $2,005.50 an ounce.