Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold surged 2.1% to close at $1,670 as yields and the dollar retreated after the Bank of England's dramatic intervention to stabilize Britain's chaotic financial markets.

British markets have been scrambled since new PM Liz Truss announced on Friday her radical plan to stimulate Britain's struggling economy with huge, unfunded tax cuts. Fearing the profligate move would accelerate rampant UK inflation already nearing 10%, investors dumped British assets on a shocking scale.

Hoping to reverse the selloff, the BoE said today that it will intervene to buy government bonds at "whatever scale is necessary" to force down yields on long-term UK government bonds, which rocketed to the highest levels in 14 years.

Benchmark 10-year Treasury yields retreated from around 4% to 3.7% as investors, fearing global contagion, fled to US government debt. Falling yields lift gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar tumbled along with yields, dropping 1.2% against major rivals as the sterling and euro rallied on the intervention. A weaker dollar supports gold and other commodities by making them less expensive in other currencies.

Wall Street also applauded the intervention, with all three major indexes jumping more than 2% on the prospect of increased liquidity in the global market.

Sharply higher oil prices also lifted gold prices. US benchmark WTI crude jumped 4.6% to more than $82 per barrel on the expected impact of Hurricane Ian on oil and gas production.

The other precious metals were also higher, with silver rising 3% while platinum and palladium added 2.5% and 3.8%, respectively.

At the Comex close: December gold surged $33.80 to $1,670; December silver climbed 54 cents to $18.88; January platinum picked up $21.10 to $860.80; and December palladium jumped $78.70 to $2,169.10 an ounce.