Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold tumbled 2.1% to close under $1,764 as growing concerns about economic growth drove global investors into the US dollar, hammering alternative stores of value. It was the metal’s lowest finish since last December.

The risk of recession in the Eurozone and UK rose sharply after the price of natural gas jumped 17% because of uncertainty about supplies from Russia. Gas markets are grappling with the disruption of flows through the Nord Stream pipeline from maintenance and politicking around the region’s support for Ukraine.

The euro slumped to a 20-year low as higher fuel prices fed into investors’ anxiety about possibility of recession. The dollar, in turn, rallied 1.5% to a 20-year high against a basket of currencies on speculation that the Fed will push ahead with sharply higher interest rates despite recession risks.

A rising dollar weighs on gold and other commodities by making them more expensive in other currencies, limiting overseas demand.

Benchmark US Treasury yields receded to under 2.8% on flights to the perceived safety of US government debt. Meanwhile, spread between 2- and 10-year Treasurys fell briefly below zero, temporarily inverting the yield curve as market sentiment grows increasingly pessimistic about long-term prospects for the economy.

Gold was further hurt by plunging oil, with WTI crude falling 9.2% to under $98.50 on the rising dollar and expectations that weakening global growth will limit demand. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were also lower, with silver falling 2.8% while platinum and palladium lost 2.4% and 1%, respectively.

At the Comex close: August gold lost $37.60 to $1,763.90; September silver shed 55 cents to $19.12; October platinum fell $20.60 to $850.70; and September palladium slid $19.30 to $1,918.80 per ounce.