Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slid 0.5% to close under $1,755 after more hawkish Fed talk boosted the dollar for a second day, pressuring alternative stores of value despite signs of recession in the US economy. The metal ended the week down 0.9%.

Boston Fed President Susan Collins added her voice the choir of Fed officials talking up the need for higher interest rates. Speaking the CNBC, Collins said a fifth straight jumbo hike of 75 basis points is "definitely on the table" for the Fed's December meeting.

The hawkish comments come one day after St. Louis Fed President James Bullard warned that rates may need to rise as high as 7%, almost twice the current level, to put a meaningful dent in inflation. And Minneapolis Fed President Neel Kashkari said a single month of lower inflation is not evidence "that inflation has stopped climbing."

Last week's CPI and PPI data showed both consumer and wholesale inflation dropping to multi-month lows in October, prompting the markets to anticipate smaller and slower rate hikes going forward. The recent Fed talk has pushed back on that narrative.

Benchmark 10-year Treasury yields jumped back above 3.8% on Collins remarks, pressuring gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar tracked higher with yields, adding 0.2% against major rivals. A rising dollar weighs on gold and other commodities by them more expensive in other currencies, limiting overseas demand.

Meanwhile, the Conference Board reported that the Fed's most aggressive monetary tightening since the 1980s may have already pushed economy into recession. US leading economic indicators fell another 0.8% in October, the eight straight month of declines. "The economy is possibly in a recession," concluded Ataman Ozyildirim, senior director of economic research.

Global demand for silver is project to rise 16% this year, according to the Silver Institute, creating the biggest supply deficit in decades. Demand for coins and bars, as well as jewelry and silverware, are expected to reach record levels.

The other precious metals were mixed for the day and lower for the week. Silver added 0.1% today but slid 3.1% this week. Platinum dropped 0.7% for a weekly decline of 5.2%. Palladium lost 3.5% on the day and 4.4% on the week.

At the Comex close: December gold slid $8.60 to $1,754.40; December silver added 2 cents, to $20.99; January platinum dropped $7.20 to 984.30; and December palladium fell $71.10 to $1,938.90 an ounce.