Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold rebounded 1% to close above $1,253 as the easing of political turmoil in Germany and action by China to strengthen the yuan caused the dollar to fall, boosting demand for alternative stores of value.

German Chancellor Angela Merkel reached an agreement on immigration policy with recalcitrant elements of her coalition late yesterday, averting a major political crisis in the Eurozone's largest economy. The deal prevents the risk of new elections that may have ended her government and destabilized the EU, which is already under pressure from Britain's exit and the election of a euroskeptic government in Italy.

The dollar fell 0.3% against major rivals led by the euro, which rallied on the German compromise. The Mexican peso rallied, jumping 2% after leftist president-elect Andres Obrador calmed markets with a conciliatory speech and reached out to President Trump to preserve ties with the US. A falling dollar supports gold and other commodities by making them less expensive overseas.

The buck was also undermined by China's intervention to stabilize the yuan, which had been falling in recent weeks because of slowing growth and trade conflict with the US. The yuan constitutes 20% of the Federal Reserve's trade-weight dollar index, the most of any currency. Action to stem its slide is viewed by currency traders as an impediment to the dollar's ongoing rally.

The other precious metals were also higher, with silver rising 1.3% while palladium added 0.4% and platinum surged 4%, reclaiming most of yesterday's 5.2% plunge.

As a key constituent in auto catalytic converters, platinum came under heavy selling pressure yesterday after President Trump threatened global auto tariffs to extract concessions from trading partners.

At the Comex close: August gold rebounded $11.80 to $1,253.50; September silver gained 20 cents to $16.04; October platinum jumped by $32.90 to $846.30; and September palladium picked up $3.60 to $938 an ounce.