Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.8% to close above $1,796 as bond yields and the dollar receded, lifting demand for alternative stores of value.

The metal reached as high as $1,815 in intraday trade before pulling back on profit-taking after Fed Chair Jerome Powell said it is "time to taper." For the week, gold gained 1.6%, notching its fourth winning week in the past five.

At a discussion sponsored by the South African central bank, Powell said today that US inflation is likely to remain elevated for longer than previously thought, perhaps well into next year. Higher prices are being fueled by supply shortages rather than excessive demand, he added, making them more difficult to control.

The Fed chair speculated that the US could reach "maximum employment" sometime next year if the economy continues to improve. And while the Fed could begin tapering quantitative easing soon, raising interest rates until full employment would be "premature," he said.

The dollar dropped another 0.2% as traders unwound bets that US would raise rates ahead of other major economies. A weaker dollar lifts gold by making it cheaper in other currencies.

The Bank of England has already signaled rate hike because of inflation, and the ECB is under pressure to follow suite after eurozone inflation expectations rose to the highest level in year.

Benchmark 10-year Treasury yields slipped back under 1.65%, supporting gold by decreasing the opportunity cost for holding it instead of bonds.

The other precious metals were higher for the day but mixed for the week. Silver rose 1.2% for a weekly gain of 4.7%. Platinum added 0.2% today and but slipped 0.6% this week. Palladium climbed 0.9% for a weekly loss of 2%.

At the Comex close: December gold gained $14.40 to $1,796.30; December silver climbed 28 cents to $24.45; January platinum added $2.40, to $1,052.10; December palladium rose $17.50 to $2,035.60 an ounce.