Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slipped 0.3% to close under $1,203 as strong US economic data rallied bond yields and the dollar, undermining demand for alternative stores of value.

The ISM services index climbed to the highest level in 21 years in September, with all 17 industries surveyed reporting growth. The strength in retail, health care, finance, and other service-oriented businesses suggests the likelihood of solid GDP growth to close out the year.

Yields on benchmark 10-year Treasury notes jumped by the most since November 2016, after Donald Trump was elected President. Hedge funds and other large speculators had placed a record number of short positions last week, betting on lower yields. The upbeat data forced an abrupt short-covering rally, adding to yield momentum.

The dollar picked up 0.3% against major rivals as traders speculated that the strong ISM data will make the Fed more likely to raise rates for a fourth time in December. The buck overcame early-session weakness created by a rally in the euro after Italy indicated that it would submit to EU rules on its budget. The de-escalation of Italy's fiscal turmoil also weighed on gold by reducing safe-haven demand.

The other precious metals were mixed, with silver dipping 0.2% while platinum and palladium added 0.2% each.

At the Comex close: December gold slipped $4.10 to $1,202.90; December silver dipped 2 cents to $14.67; January platinum dropped $2.20 to $835.70; and December palladium slid $2.30 to $1,053 an ounce.