Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold rose another 0.9% to close at an 11-week high above $1,769 as softening inflation fueled hopes that the Fed will decelerate rate hikes, weakening the dollar and boosting alternative stores of value. The metal surged 5.5% this week, its biggest in more than two years.

The cost of living rose less than forecast in October, suggesting that the strongest inflation in 40 years might finally be retreating. Consumer inflation rate fell to 7.7%, the lowest since January; the core rate, less food and energy costs, dropped to 6.3%

The upbeat inflation data caused traders to speculate that the Fed might reduce the size and frequency of interest rate increases going forward. The odds of a fifth-straight hike of 75 basis points in December fell below 30%, down from 50% one week ago, according to Fed fund futures trading.

Extending yesterday's tumble of 2.1%, the buck dropped another 1.7% for a two-day selloff of 3.8%, its biggest in more than 13 years. A weaker dollar supports gold and other commodities by making them less expensive in other currencies, lifting overseas demand.

Safe-haven buying also helped the metal after the University Michigan reported consumer sentiment fell in October to the lowest level since last June, largely on fears that higher interest rates and inflation will trigger a recession.

The other precious metals were mixed for the day but higher for the week. Silver edged down 0.2% but still rose 4.3% this week. Platinum had a daily loss of 1.6% but a weekly gain of 8.1%. Palladium added another 3.7% for a weekly increase of 10%.

At the Comex close: December gold gained $15.70 to $1,769.40; December silver dipped 3 cents to $21.67; January platinum shed $16.90 to $1,038.10; and December palladium climbed $72.30 to $2,026.50 an ounce.