Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold eased 0.5% to hold above $2,057 as a mild rebound in yields and the dollar prompted traders to take profits from the metal’s five-day rally despite falling inflation and soft data. For the month gold finished 3.2% higher on rising expectations that the Fed is done raising interest rates.

The Fed’s favorite gauge of prices was flat in October, offering yet more evidence that inflation is cooling. For the year, the personal consumption expenditures index dropped to 3%, the lowest reading since February 2021. The core rate, less food and energy, edged up 0.2% for the month but slowed to 3.5% for the year, the lowest since early 2021.

Meanwhile, consumer spending weakened in October, rising a modest 0.2% after surging 3.6% during Q3, as higher interest rates took a bite out of auto sales. Consumer spending accounts for around two-thirds of GDP. And pending home sales dropped to a record-low reading in October.

Benchmark 10-year Treasury yields bounced off recent lows, pushing back above 4.3% after Eurozone inflation fell to 2.4% this month, the lowest level in two years. The drop reflects relative weakness in the region’s economy, making US government bonds more attractive by comparison.

The dollar also perked up, adding 0.8% against major rivals led by the euro. The buck is still on track to lose 3% in November for its worst month in a year. Gold and the dollar typically have a negative correlation because gold is denominated in dollars overseas, making it cheaper when the dollar falls and more expensive when it rises.

The other precious metals were mixed for the day and higher for the month. Silver added 1.1% for a whopping monthly rise of 11.8%. Platinum slipped 0.6% but still added 1% this month. Palladium dropped 2% for the day but jumped 10.4% for the month.

At the Comex close: February gold dropped $.9.90 to $2,057.20; March silver climbed 28 cents to $25.66; January platinum dipped $5.50 to $935.90; and March palladium shed $21.10 to $1,020.40 an ounce.