Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold surged 0.8% to close near $1,224 after dovish comments from Fed Chair Jerome Powell knocked the dollar lower and boosted demand for alternative store of value.

Speaking in New York, Powell said the Federal funds rate is now "just below" the level that would be "neutral for the economy." A neutral rate level, which neither stimulates nor constrains the economy, has been an oft-stated goal of Fed policy.

The surprising statement seemed to reverse Powell's assertion earlier this month that rates are still far from neutral. Analysts attributed his dovish volt-face to slowing US and global growth, a weakening US housing market, tumbling equity markets, and rising conflicts between the US and most trading partners.

The dollar tumbled from early-session gains to a loss of 0.6% as investors digested the implications of Powell's remarks and concluded that the Fed's steady pace of rate hikes is coming to an end. Rising interest rates have inflated the dollar's value relative to competing currencies, in turn pressuring gold and other commodities priced in it for global trade by making them more expensive overseas.

Some soft economic data also pressured the buck. New-home sales fell to almost a three-year low in October, adding to evidence that the housing boom is topping out. In addition, selling prices were nearly 9% lower than September and 12% lower than one year ago.

Equities bounced sharply higher on the Powell statement, with the Dow adding 2% and Nasdaq 2.3%.

The other precious metals were mostly higher, with silver and palladium rising 1.7% and 2.7% while outlier platinum slid 1.1%.

At the Comex close: December gold gained $10.20 to $1,223.60; March silver jumped 23 cents to $14.46; January platinum dropped $9 to $826.30; and March palladium climbed $29.80 to $1,151.90 an ounce