Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slipped 0.6% to close above $1,934 as traders took profits from last week’s 5.1% rally while upbeat earnings lifted equities and yields, undercutting safe-haven assets.

All three major US stock indexes were sharply higher on optimism that this week’s quarterly earnings reports will show solid advances. Q3 earnings for S&P 500 companies are projected to have risen 2.2% year-over-year, according to London Stock Exchange data.

Investors were willing to set aside the Gaza conflict, at least for now, after a full-scale ground assault by the Israeli military did not materialize over the weekend.

Benchmark 10-year Treasury yields crept back above 4.7% on the shift away from safety to risk. Higher yields weigh on gold by increasing the opportunity cost for holding it instead of bonds as a safe -haven asset.

Gold’s slide was backstopped by a falling dollar and dovish comments from Fed officials. The buck dropped 0.3% against major rivals as Forex traders tracked to riskier currencies and the prospect of higher interest rates dimmed.

Chicago Fed President Austan Goolsby told the Financial Times today that falling inflation is an “undeniable” trend and not “a one-month blip.” Patrick Harker of the Philadelphia Fed reiterated his view that the Fed is done raising interest rates.

Fed fund futures trading sees only a 7% chance that the central bank will hike in November.

The New York Fed’ Empire State index of business conditions dropped to negative 4.6, signaling ongoing struggles in the manufacturing sector.

Adding to pressure on gold, US benchmark WTI crude fell 1% to under $90 on reports that the US and Venezuela progressing toward an agreement that will ease sanctions on Venezuelan oil producers. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were mixed, with silver sliding 0.6% while platinum and palladium rose 1.7% and 0.1%, respectively.

At the Comex close: December gold slipped 7.20 to $1,934.30; December silver dropped 13 cents to $22.77; January platinum added $15.20, to $899.40; and December palladium edged down $1.60 to $1,146.80 an ounce.