Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinExtending last week's 1.6% rally, gold added another 0.6% to close near $1,808 as concerns about inflation lifted demand for alternative stores of value. It was the metal's highest finish in nearly six weeks.

On Friday, Fed Chair Jerome Powell acknowledged that inflation is likely to persist well into 2022, softening his yearlong stance that higher prices are merely a transitory effect of post-lockdown demand. Powell added that talk of raising interest rates, the Fed's favorite tool for fighting inflation, is "premature" because of pandemic uncertainty and ongoing slack in the labor market.

Plus, the central bank needs to end completely its $120 billion per month easing program before it can effectively increase rates, something that is unlikely to happen before mid-2022, even if the taper starts in November.

With the CPI climbing at the fastest rate in 30 years, and with rate hikes apparently off the table, investors are again seeking out inflation hedges like gold and silver.

Also supporting gold, benchmark 10-year Treasury yields edged lower as strong corporate earnings stoked risk appetite, lifting stocks, and prompting traders to sell bonds. Falling yields reduce the opportunity cost for holding it as a safe-haven asset.

The dollar rose 0.2% against major rivals, capping gold's gain by making it pricier overseas.

The other precious metals were also higher with silver and palladium both rising 0.6% while platinum picked up 1.1%.

At the Comex close: December gold gained $10.50 to $1,806.80; December silver rose 14 cents to $24.59; January platinum picked up $11.70 to $1,063.80; and December palladium climbed $12.60 to $2,048.20 an ounce.