Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.2% to close at $1,658 as weakening US economic data caused pullbacks in yields and the dollar, lifting alternative stores of value.

The Conference Board survey of consumer confidence fell to a three-month low in October as Americans grow increasingly worried about the possibility of a severe economic downturn. A similar gauge looking six months ahead showed expectations falling to 78.1, where any reading below 80 is associated with recession.

The Case-Schiller index showed US home prices fell in August for the second straight month as surging mortgage rates are reducing demand. Home-builder expectations over the next six months tumbled to the lowest level in 10 years.

The weak data comes one day after S&P Global reported US business activity contracted for a fourth straight month in October, concluding that "the US economic downturn has gathered significant momentum."

Benchmark 10-year Treasury yield pulled back to 4.1% as traders speculated that the Fed will have to moderate their aggressive rate-hike regimen in coming months to prevent a full-blown recession. Lower yields boost gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar tumbled 1% on the shifting rate view, along with a relief rally in the UK pound after Rishi Sunak became Britain's third prime minister in two months. The former Chancellor of the Exchequer will be tasked with fixing an economic crisis triggered in part by his predecessor, Liz Truss.

A weaker dollar supports gold and other commodities by making them less expensive in other currencies, lifting demand overseas.

The other precious metals were mixed, with silver rising 0.8% while platinum and palladium lost 0.7% and 2.5%, respectively.

At the Comex close: December gold gained $3.90 to $1,658; December silver rose 16 cents to $19.35; January platinum slid $6.90 to $919.70; and December palladium shed $49 to $1,918.80 an ounce.