Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold recouped 0.5% to close near $1,282 as bargain-hunters swept in despite rising risk appetite. Weakness in the dollar, rising oil prices, and ongoing political strife in Germany supported the metal, spurring demand for alternative stores of value.

The dollar slipped 0.2% against major rivals as traders hedged positions ahead of Wednesday's release of minutes from the last meeting of the Federal Reserve. While a December rate hike is largely priced into the currency markets, any dovish signals from the Fed about inflation could raise questions about the pace of hikes in 2018, undermining the buck and boosting gold.

Oil jumped 0.7% on speculation that OPEC and other major producers will extend production cuts when they meet next week. Political turmoil in Saudi Arabia and Venezuela is also supporting crude. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

Uncertainty over Germany's politics underpinned some modest safe-haven bids for gold after PM Angela Merkel's negotiations to form a new governing coalition collapsed this week, shaking the Eurozone's most stable and economically robust nation.

Existing home sales jumped in October to the highest level since June. The Chicago Fed's national economic index surged to the highest level in ten years. Equities rallied on the upbeat economic data, with the Dow and S&P 500 both gaining around 0.6%.

Gold fell 1.6% yesterday despite supportive fundamentals after $2 billion in futures contracts were dumped on Comex in a few minutes. The mystery sales triggered automatic stop-losses that pulled the metal lower by around $20. Today's partial recovery despite sharply higher equities suggests solid underlying demand.

The other precious metals also rose, with silver adding 0.7% while platinum and palladium climbed 1.2% and 1.1%, respectively.

At the Comex close: December gold recouped $6.40 to $1,281.70; December silver added 12 cents, to $16.96; January platinum picked up $15.40 to $938; and December palladium rose $10.40 to $996.50 an ounce.