Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slipped 0.5% to close under $1,989 as yields and the dollar rebounded after last week’s pullback, pressuring alternative stores of value.

After dropping last week by the most in nearly a year, benchmark 10-year US Treasury yields pushed back above 4.65% as traders assessed the likelihood that the Fed is done raising interest rates. Higher yields weigh on gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Weaker-than-expected employment data released on Friday had driven the odds of a December rate hike down to just 5%, according to CME FedWatch. Today the odds rose back to 10% as traders apparently reconsidered whether the labor market is weakening enough for the Fed to reverse course.

Speeches this week by a series of Fed speakers, including Jermone Powell, should provide additional clarity on the rate view.

Tracking higher with yields, the dollar added 0.2% against major rivals, bouncing off a six-week low. A rising buck is a headwind for gold and other commodities because it makes them more expensive in other currencies, limiting overseas demand.

The other precious metals were also lower. Silver dropped a 0.2% while platinum lost 2.8% and palladium fell 1.2%.

At the Comex close: December gold slid $10.70 to $1,988.60; December silver dipped 5 cents to $23.3; January platinum shed $26.70 to $917.60; and December palladium dropped $14 an ounce.