Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold surged 1.9% to close above $1,825 after soft consumer inflation pressured yields and the dollar, lifting alternative stores of value. It was the metal's highest finish since late June.

The consumer price index rose a scant 0.1% in November, far less than forecast, to pull the annual inflation rate down to 7.1%, the lowest since late 2021. The annual core rate, less volatile fuel and food prices, slipped to 6%.

The weaker than expected CPI print raised speculation that the Fed will slow the pace of interest rate increases in coming months, with a ceiling of 5%. While a hike of 50 basis points is almost universally anticipated tomorrow, lifting the rate to a range between 4.25% and 4.5%, traders are now betting on hikes of no more than 25 basis points at the ensuing two meetings.

Benchmark 10-year Treasury yields fell to just above 3.5% on the dovish outlook and 2-year yields, more sensitive to rate changes, fell by the most since November. Lower yields help gold by decreasing the opportunity cost for holding it instead of bonds as a safe-have asset.

The dollar plunged 1.1% to a six-month low, supporting gold and other commodities priced in it for international trade by making them less expensive in other currencies.

The other precious metals were also sharply higher. Silver jumped 2.5% while platinum picked up 3.1% and palladium climbed 2.8%.

At the Come close: February gold surged $33.20 to $1,825.50; March silver rallied by 59 cents to $23.99, the highest level since April; January platinum picked up $30.90 to $1,038.90; and March palladium climbed $52.60 to $1,936.70 an ounce.