Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold gained 0.3% to close above $2,723 despite higher Treasury yields and a stronger dollar as investors sought refuge from geopolitical turmoil in the Middle East and uncertainty about the upcoming US elections. Bullion hit an intraday record near $2,741 before slipping back. Silver jumped 2.5% to finish at $33.87 an ounce.

Solid data has recently underscored the resilience of the US economy, fueling confidence the Fed can take its time in cutting interest rates. Retail sales rose more than expected last week and five of the 10 metrics in today's release of the Conference Board's Leading Economic Indicators were positive. The Atlanta Fed has raised its Q3 estimate for GDP growth to 3.4%.

Fed fund futures traders now see an 87% likelihood that the Fed will cut interest rates by a quarter-point in November, down from nearly 91% on Friday and 100% a month ago. Dallas Fed President Lorie Logan said today that the "strong and stable" economy will allow for slow, deliberate monetary easing

Benchmark 10-year Treasury yields climbed above 4.1% to the highest level since July on the shifting rate view, capping gold's rise by increasing the opportunity cost for holding it instead of bonds as a safe haven.

Tracking higher with yields, the dollar added 0.3% against major rivals, extending its three-week run of gains. A rising buck weighs on gold and other commodities by making them pricier overseas.

Despite these headwinds, gold still extended its remarkable rally as investors seek portfolio diversification in the face of high equity prices, rising geopolitical uncertainty, and an exploding US public debt.

The US presidential race is balanced on a knife edge, the tensions between Israel and both Hamas and Hezbollah continue to escalate, and the US budget deficit for fiscal 2024 ballooned to the third-highest level ever.

Gold has gained 31% so far this year while achieving a succession of new all-time highs.

Platinum and palladium slid 0.7% and 2.7%, respectively.

At the New York spot close; gold gained $9.40 to close at $2,723.10; silver surged 84 cents to $33.87; platinum slipped $7.50 to $1,007.60; and palladium shed $29.30 to $1,055.60 an ounce.