Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold plunged 2.4% to close under $1,807 after Fed Chair Powell's nomination for a second term stoked equities, yields, and the dollar, undermining demand for alternative stores of value.

Ending weeks of speculation, President Biden picked Jerome Powell for a second term at the Fed's helm, choosing him over Fed Governor Lael Brainard, the more dovish finalist. The move was widely seen as a vote for stability in the process of guiding the economy though the pandemic crisis. Brainard was named for the Vice Chair role.

Wall Street cheered the choice of Powell, a Republican with ties to the financial industry and a softer approach to regulation than Brainard. Bank stocks led the rally, lifting the Dow and S&P 500 by 0.9% and 0.7%, respective, while the tech-heavy Nasdaq was nearly flat.

Bonds sold off with the rise in risk appetite, pushing benchmark 10-year Treasury yields up to 1.635%. Rising yields increase to opportunity cost for holding gold, a non-yielding asset, instead of bonds.

The dollar added 0.5% against major rivals and hit a new 16-month high versus the euro as Forex traders bet that rate hikes to curtail inflation are more likely under Powell. A stronger dollar weighs on gold and other commodities by making them pricier in other currencies.

The other precious metals were also sharply lower, with silver and platinum dropping 2% each while palladium plunged 5.9%.

At the Comex close: December gold fell $45.30 to $1,806.30; December silver dropped 48 cents to at $24.30; January platinum shed $20.90 to $1,015.10; and December palladium surrendered $122.60, to $1,950.60 an ounce.