Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold was little changed, edging down 50 cents despite falling yields, after the CPI showed core inflation remained sticky in November.

The cost of living was slightly higher than expected in November, with the consumer price index adding 0.1% while most forecasts called for no change. The 12-month rate dipped to 3.1% from 3.2%, as expected. The so-called core CPI, less food and energy, was slightly stronger at 0.3%, boosted by higher prices for used cars and rent.

Benchmark 10-year Treasury yields fell a bit as traders speculated that the inflation print will have no material effect on the Fed’s two-day policy meeting, which began today. The central bank is almost certain to leave rates unchanged in December and January.

Yields on rate-sensitive 2-year Treasurys inched up slightly, however, on expectations that rate cuts will come later than previously thought. The probability of a March decrease has dropped to 42% from 57% one week ago, while May has risen to around 80%, according to the Fed funds futures market.

Stemming gold’s losses, the dollar dropped 0.2% on a stronger euro. A weaker dollar supports gold and other commodities by making them cheaper overseas.

Weighing on gold, WTI crude fell 3.8% to close at a six-month low on rising worries about global demand and OPEC+ production cuts. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were mixed, with silver sliding less than 0.1% while platinum and palladium picked up 1.7% and 1.8%, respectively.

At the Comex close: February gold dipped fifty cents to $1,993.20; March silver slipped 4 cents to $23.02; January platinum rose $15.30 to $931; and March palladium climbed $17.70 to $982.30 an ounce.