Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinAdding to yesterday's 0.9% rally, gold gained another 0.5% to close at $1,200 as the dollar slid further on President Trump's pushback against tighter monetary policy from the Federal Reserve.

Speaking to a select group of big-money donors recently, the President reportedly criticized Fed Chair Jerome Powell for raising interest rates, saying he expected his nominee to support his trade objectives by weakening the dollar. The comments reinforced his July statement that he was "not thrilled" by the June rate increase.

The dollar fell 0.6% against major rivals, extending yesterday's slide, as traders speculated that presidential pressure may influence Fed policy, or at least change market expectations about the dollar. A weaker buck typically supports gold and other commodities by making them less expensive overseas.

Further undermining the greenback, Dallas Fed President Robert Kaplan said the Fed should stop raising benchmark rates after another three or four gradual hikes to take stock of the economy. Kaplan voiced concern that the flattening yield curve, in which long-dated bonds yield little or no more than short-dated ones, is a signal that the economy may be reaching the end of its strong growth trend.

Kaplan's comments come one day after Atlanta Fed President Raphael Bostic called for slowing rate hikes to one more this year, citing trade tensions and the Turkish currency collapse as risks to growth.

Gold's gains were capped by rising risk appetite. The Dow and S&P 500 rose 0.3%, with the latter hitting a new record, on optimism that this week's Sino-US meeting on trade may reduce the threat of an all-out trade war.

The other precious metals were mostly higher, with silver and palladium rising 0.7% and 1.3%, respectively, while platinum dipped 0.1%.

At the Comex close: December gold gained $5.40 to $1,200; September silver rose a dime to $14.77; October platinum dipped 90 cents to $793; and September palladium picked up $11.30 to $910 an ounce.