Daily Gold Update

Source:Dana Samuelson, American Gold Exchange

AustinGold and silver rebounded from short-term lows as jobless claims surged to their highest level in over a year. Higher claims boost the prospects of dovish Fed rate cuts in the future. Conversely, inflation for September was higher than anticipated, which could push the Fed towards a less dovish fed rate policy in the future. Following the Fed’s pivot from defending against inflation to enhancing labor market participation last month, precious metals markets discounted inflations bump higher today in favor of employment concerns.

Initial claims for US unemployment benefits surged to 33,000 to 258,000, which were far higher than analysts anticipated. The surge is attributed to the aftereffects of Hurricane Helene in North Carolina and Florida, automobile-related layoffs in Michigan, and strikes against Boeing in California and Ohio. Analysts are expecting ongoing jobless claims to be more volatile than has recently been the case due to the knock-on effects of Hurricane Helene and now Hurricane Milton, which ravaged Florida yesterday.

Inflation proved to be sticky with the release of the September CPI figures this morning. Headline CPI surged 0.3% month by month but fell on an annual basis from 2.5% to 2.4%. Pushing headline CPI higher were food at 0.4% and shelter at 0.2%, which combined equal 75% of the monthly all items increase. Core CPI, which excludes food and energy, increased 0.2% MoM in turn boosting core CPI on an annual basis from 3.2% in August to 3.3% in September.

The Fed prefers the Personal Consumption Expenditure metric over the CPI. The CPI measures the change in the out-of-pocket expenditures of all urban households while the PCE index measures the change in goods and services consumed by all households. The PCE tends to reveal changes in consumer spending habits quicker than the CPI does. New monthly PCE data will be released tomorrow.

Both the value of the US dollar on the US dollar index and the yield on the 10-year US treasury bill edged slightly higher. The dollar gained 0.08 or 0.07% to 103.01 on the index and the 10-year T-bill inched up another 0.031 to 4.101% in afternoon trading. Inversely correlated, a rising dollar and/or rising yields weigh on gold, which does not offer a yield.

At the New York spot close: gold gained $14.60 to $2,620.60; silver gained 65 cents to $31.08; platinum rose $20.30 to $969.00; and palladium surged $29.30 to $1072.20 an ounce.