Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold dropped 1.5% to close at a 30-month low under $1,656, hammered by an ongoing rally in the dollar as the Fed leans into its aggressive rate-hike regimen. The metal finished the week 1.7% lower.

The dollar soared to a new 20-year high, fueled by the Fed's third-straight rate hike of 75 basis points earlier this week and Jerome Powell's vow of more to come, even at the risk of recession. Higher rates lift the dollar by attracting Forex investment chasing yield, pressuring gold in turn by making it pricier in other currencies.

Further fueling the buck's relentless advance, the euro and UK pound plunged to 20-year and 37-year lows, respectively, after the eurozone PMI came in weaker than expected and the UK finance minister announced huge, debt-financed tax cuts.

US business activity contracted in September for the third straight month, according to S&P Global, While the reading was slightly higher than August, the weakest since April 2020, it still showed "an economy struggling in a stagflation" and likely heading for a recession.

Wall Street tumbled again on the growing recession risk and higher interest rates, with all three major indexes shedding more than 1.6%. For the week the Dow lost 4% while the S&P 500 dumped 4.6% and the Nasdaq 5.1%.

Yields on the 2-year Treasury marched above 4.2%, the highest level since October 2007, on inflation and interest rate worries. Benchmark 10-year Treasury yields edged down slightly but hovered neared 11-year highs, weighing on gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The other precious metals were also lower for the day and week. Silver dropped 3.6% today for a weekly loss of 2.4%. Platinum shed 5.2% today and 4.7% this week. Palladium fell 4.8% for the day and 2% for the week.

At the Comex close: December gold lost $25.50 to $1,655.60; December silver shed 71 cents to $18.91; October platinum slid $47.30 to $858.70; and December palladium dropped 104.50 to $2,070.50 an ounce.