Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gold rose 0.6% to close at an 11-month high above $1,322 as the dollar retreated and oil rallied, boosting demand for alternative assets. The metal finished August with a 4% gain for its best month since January.

Treasury Secretary Steven Mnuchin knocked the idea of a stronger dollar today, telling CNBC that weaker dollar "is somewhat better for us" when it comes to trade. The dollar immediately plunged from gains into losses, supporting gold and other commodities priced in it for international trade by making them less expensive overseas.

Mnuchin's comments suggest that the traditional "strong dollar" policy is losing support at the Treasury as the Trump administration angles to resuscitate manufacturing and boost growth. A strong dollar puts US goods at a pricing disadvantage overseas against weaker currencies.

The comments may also signal the rumblings of a new currency war among major economies. After last weekend's meeting of global central bankers at Jackson Hole, Bank of Japan Governor Haruhiko Kuroda said he will continue monetary easing, it part to keep the yen's rise in check. Similarly, several ECB policy makers told Reuters that they plan to maintain stimulus because the euro's 14% rise against the dollar this year could damage exports.

The last time these three nations competed to devalue their currencies, the so-called Currency War of 2009-2011, gold skyrocketed to an all-time high above $1,900 as investors sought protection in alternative stores of value.

Gold also received support today from a rebound in oil prices, which rallied around 3% on worries that Hurricane Harvey will disrupt production in Texas. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were higher for the day and month. Silver rose 0.4% to close the month 4.1% higher. Platinum picked up 0.3% today and 6.1% this month, while palladium picked up 0.1% for a gain of 6.2% in August.

At the Comex close: December gold gained $8.10 to $1,322.20; December silver added 7 cents, to $17.58; October platinum picked up $3.30 to $998.50.10; and December palladium edged up $1.20 to $932.25 an ounce.