Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slid 0.5% to close above $1,861 after solid economic data reinforced speculation that the Fed may raise interest rates sooner than expected, nudging traders to take profits from yesterday rise to a fresh five-month high above $1,870.

The Philadelphia Fed manufacturing index was far stronger than expected in November, surging to 39 from 28.3 in October, where anything over zero indicates expansion. Following a weak reading for New York's Empire State index during the same period, economists were forecasting around 22.

In addition, first-time jobless claims dropped last week to a pandemic low of 268,000. While most forecasts expected a deeper cut to 260,000, the total still indicated an encouraging reduction in layoffs due to the Delta variant.

Two prominent Fed officials downplayed inflation today while signaling the possibility of at least one rate hike in mid-2022. Renowned policy dove Charles Evans of the Chicago Fed said he expects inflation to drop back to 2% by the end of next year as supply-chain issues are "rectified," but remains "open-minded" about hikes if needed.

Separately, New York Fed President John Williams defended the central bank's policy of letting inflation run above 2% for an expended period, known as "inflation averaging," before intervening with rate hikes. But he acknowledged that prices have risen more broadly than anticipated.

Gold's slide was backstopped by a weaker dollar, which fell 0.3% against major rivals as Forex traders took profits from the buck's recent rally to a 16-month high. A weaker dollar makes gold less expensive overseas.

The other precious metals were Also lower, with silver losing 1.1% while platinum and palladium declined 1.2% and 2.2%, respectively.

At the Comex close: December gold slipped $8.80 to $1,861.40; December silver dropped 27 cents to $24.90; December platinum shed $12.70 to $1,056.40; and December palladium dumped $47.10 to $2,137.40 an ounce.