Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.7% to close near $1,728 as yields and the dollar pulled back on a soft Beige Book despite more hawkish jawboning from Fed officials.

The US economy is projected to weaken over the next year, according to the Fed's Beige Book survey, as rising interest rates, supply constraints, and labor shortages continue to hamstring growth. Demand for goods and services are expected to soften in the next six to twelve months.

Benchmark 10-year Treasury yields pulled back under 2.7% as investors swept back to the perceived safety of US government debt. Falling yields help gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar also retreated, dropping 0.6% against major rivals after jumping to a 24-year high against the yen. The lower dollar also supported gold by making it cheaper in other currencies.

Despite the uncertain economic outlook, additional Fed officials voiced support for aggressive monetary tightening. Vice Chair Lael Brainard and Richmond Fed President Thomas Barkin said separately that policy will need to be restrictive "for some time," while Cleveland Fed President Loretta Mester warned that inflation may yet rise further.

The other precious metals were also higher, with silver rebounding 2% while platinum and palladium rose 1.6% and 2.5%, respectively.

At the Comex close: December gold gained $14.90 to $1,727.80; December silver added 35 cents, to $18.26; October platinum rose $13.30 to $847.20; and December palladium climbed $49.60 to $2,022.80 an ounce.