Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold retreated 0.9% to close above $1,327 as traders took profits from its 8% rally over the past month. The metal had risen for five straight sessions and nine of eleven this year before today's correction.

Most asset classes tracked lower on the day. US equities fell from record highs, with the Dow dropping 0.4% and the S&P 500 0.2%. The dollar also lost, surrendering 0.4% against major rivals as forex investors shifted to the euro and pound.

Yields on 10-year Treasury notes jumped to 2.6%, the highest since March, after yesterday's Beige Book report from the Fed suggested that labor shortages are beginning to translate into higher wages.

Worries of a potential US government shutdown are creating some unusually trading patterns. Typically, weakness in equites and the dollar supports gold as investors seek out safe havens and dollar-priced commodities become cheaper overseas. Today, however, they all fell together as investors liquidated holdings as the government funding deadline approaches.

If Congress fails to pass a budget by Saturday, stopgap funding expires. Federal employees will be furloughed, and most functions will cease, to the detriment of economic growth. The last shutdown, in October 2013 over Obamacare, lasted 16 days and cost the economy $24 billion.

The other precious metals were also lower, with silver falling 1.2% while platinum and palladium slid 0.4% and 1.5%, respectively.

At the Comex close: February gold retreated by $12 to $1,327.20; March silver lost 22 cents to $16.95; April platinum slid $3.70 to $1,007.20; and March palladium dropped $16.40 to $1,093.30 an ounce.