Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slid 0.8% to close near $1,740 after hawkish comments from prominent Fed officials rallied the dollar, undercutting alternative stores of value.

St. Louis Fed President James Bullard said today that interest rates will need to rise much higher and "stay there all during 2023 and into 2024" to break the hottest inflation in 40 years. The noted policy hawk stated rates should rise at least into the range of 5% to 5.25%, up from the current 3.75% to 4%.

New York Fed President John Williams reinforced that aggressive approach, saying separately that the US economy is likely to weaken even more than the Fed has forecast, and that unemployment could climbed above 5% from the current 3.75% as a result of restrictive monetary policy.

The dollar rallied 0.7% against major rivals, rising from sessions lows on the Fed talk. A stronger dollar weighs on gold and other commodities by making them more expensive in other currencies.

Gold was backstopped by safe haven bids after China's hyper-restrictive Covid policies caused mass protests over the weekend. The recent lockdowns in major Chinese cities are a new headwind for China's already-struggling economic growth.

The other precious metals were mixed, with silver dropping 2.2% while platinum and palladium rose 1.2% and 0.9%, respectively.

At the Comex close: December gold slid $13.70 to $1,740.30; March silver lost 48 cents to 21.13; January platinum picked up $11.50 to $999.30; and March palladium rose $16 to $1,846.80 an ounce.