Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold fell 1.7% to close near $2,592 as robust US data reinforced the Fed’s decision to slow interest rate cuts in 2025. Almost all of bullion’s drop came late yesterday following the Fed’s hawkish policy statement, which sharply boosted Treasury yields and the dollar. Silver fell 4.3% to finish at $29.09, with most of this loss coming yesterday.

At the end of its two-day policy meeting yesterday, the Fed cut interest rates by a quarter-point, as expected. But it also delivered a hawkish update to its dot-plot forecast, calling for just two quarter-point cuts in 2025, down from four in the September update.

Citing unusually strong US economic data and low unemployment, Fed Chair Jerome Powell said the rate cut was “a close call” and suggested that any future reductions will occur on a wait-and-see basis.

Data released today underscored the Fed’s desire for caution. GDP in Q3 came in even stronger than previously estimated. The economy grew 3.1% from July through September, marking its second consecutive quarter above 3%. Meanwhile, jobless claims fell more than expected last week, signaling resilience in the labor market.

Benchmark 10-year Treasury yields surged to a two-month high near 4.6% over the past two sessions, pressuring gold by increasing the opportunity cost for holding it instead of bonds for safety.

The dollar strengthened for a second day, adding another 0.3% to yesterday’s 1.1% rally on the prospect of fewer rate cuts in 2025. A rising dollar weighs on gold and other commodities by making them pricier overseas.

Platinum and palladium slid 0.7% and 0.5%, respectively.

At the New York spot close: gold fell $44.30 to $2,592.20; silver plunged $1.32 to $29,09; platinum slipped $6.90 to $925.70; and p0alladium shed $4.30 to $915.30 an ounce.