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AGE Daily Gold Update presents a recap on today's action in the precious metals markets. View archives.


10/20/2017: Gold drops on tax cut view

Source: Bill Musgrave, American Gold Exchange

Austin Gold fell 0.7% to close at $1,280.50 as the dollar jumped on improving prospects for tax reform, reducing demand for alternative stores of value. The metal dropped 1.9% for the week.

The Senate narrowly approved a blueprint for next year's budget, clearing a major hurdle for the passage of President Trump's proposed tax cuts. The vote was crucial because it will enable the Senate to pass forthcoming tax legislation with a simple majority though a budgetary procedure known as reconciliation, preventing a filibuster by Democrats. The budget allows tax cuts to add $1.5 trillion to the federal deficit over the next decade.

The dollar jumped 0.5% on optimism about the eventual tax overhaul, which is expected to boost inflation by stimulating the economy. Rising inflation is likely to result in higher interest rates, which support the dollar by attracting foreign exchange investment seeking higher yield.

Risk appetite was rekindled by the news, driving the Dow and S&P 500 higher by around 0.7% and 0.5%, respectively. As it stands, the Trump plan calls for dramatically lower corporate taxes, which will boost profits and share prices.

The other precious metals were mixed on the day but down for the week. Silver dropped 1% for a weekly loss of 1.9%. Platinum edged up 0.1% today but fell 2.2% this week. Palladium jumped 1.8% today but still lost 1.6% this week.

At the Comex close: December gold for delivery fell $9.50 to $1,280.50; December silver dropped 18 cents to $17.08; January platinum picked up $1.30 to $926.80; and December palladium rose $17.05 to $969.85 an ounce.


10/19/2017: Gold gains 0.6% on shift to safety

Source: Bill Musgrave, American Gold Exchange

Austin Gold gained 0.6% to close at $1,290 as the dollar and global equities retreated on Eurozone tensions, boosting demand for alternative assets.

Spain declared today that it will suspend Catalonia's autonomy and impose direct rule after the region's leaders pushed ahead with a vote to declare independence. In addition, European Union leaders told Britain its concessions on EU members living in the UK were inadequate, raising new questions about the viability of Brexit talks.

Global equities receded from record highs, with European shares marking their biggest losses in two months on the Spanish turmoil and renewed Brexit uncertainty. US pulled back slightly on soft earnings reports from several tech companies, including Apple. Treasury yields fell and prices rose as investors shifted from risk to safety.

The dollar dropped 0.2% against major rivals as traders shifted into the Swiss franc and euro. The buck rose slightly from session lows, however, after the Philly Fed region reported manufacturing rose to a five-month high in October despite a plunge in new orders. A softer dollar supports gold and other commodities by making them less expensive overseas.

The other precious metals were mostly higher, with silver jumping 1.5% while platinum added 0.1% and palladium dipped 15 cents.

At the Comex close: December gold gained $7 to $1,290; December silver jumped 26 cents to $17.26; January platinum added $1,30, to $925.90; and December palladium inched down 15 cents to $952.80 an ounce.


10/18/2017: Gold slips on 23,000 Dow

Source: Bill Musgrave, American Gold Exchange

Austin Gold slipped 0.3% to close at $1,283 as rising risk appetite pushed stocks to new record highs, eroding demand for safe havens.

All three major US equity indexes closed at record highs together for the twenty-third time this year, with the Dow finishing above 23,000 for the first time ever. The risk rally was fueled by a new round of corporate earnings beating expectations. Also supporting risk appetite, the Fed's Beige Book found economic growth "split between modest and moderate," though it could find little evidence of inflation.

The dollar edged 0.1% lower, pressured by a rising euro as traders speculate that the ECB will announce plans to taper quantitative easing when it meets next week.

The other precious metals also finished lower, with silver dropping 0.3% while platinum and palladium lost 1.1% and 2.4%, respectively.

At the Comex close: December gold slipped $3.20 to $1,283; December silver slid 4 cents to $17; January platinum dropped $10.20 to $924.60; and December palladium fell $23 to $952.95 an ounce.


10/17/2017: Gold drops 1.3% on dollar, Fed view

Source: Bill Musgrave, American Gold Exchange

Austin Gold dropped 1.3% to close above $1,286 as rising import prices boosted the dollar, eroding demand for alternative stores of value. The metal was also pressured by reports that President Trump is seriously considering economist John Taylor, a policy hawk, for the new Chair of the Federal Reserve.

US import and export prices rose in September, the Bureau of Labor Statistics reports today, building expectations that higher consumer inflation may be in the pipeline. Imports prices increased 0.7% for the biggest gain in 15 months, while export prices were 0.8% higher. Both rises were largely driven by increased fuel costs.

The dollar gained 0.3% against major rivals as traders speculated that higher trade costs will encourage a rate hike from the Fed in December. CME FedWatch, which tracks the odds of rate increases according to Fed fund futures trading, raised the likelihood to 92%, up from 88% yesterday. Higher rates support the dollar by attracting foreign exchange investment seeking higher yield, weighing on gold and other commodities by making them more expensive in other currencies.

Gold was further pressured by a report from Bloomberg that President Trump is now favoring Stanford's John Taylor to replace Fed Chair Janet Yellen in January. Author of the famous Taylor Rule, which mechanically calculates interest rates according to twin goals of inflation and employment, Taylor would almost certainly push for tighter policy. According to his equation, rates should already be nearly three times the current 1.25%.

The other precious metals were also lower. Silver lost 1.9% while platinum and palladium slid 0.8% and less than 0.1%, respectively.

At the Comex close: December gold dropped $16.80 to $1,286.20; December silver lost 33 cents to $17.04; January platinum slid $7.30 to $934.80; and December palladium dipped 35 cents to $975.95 an ounce.


10/17/2017: Gold drops 1.3% on dollar, Fed view

Source: Bill Musgrave, American Gold Exchange

Austin Gold dropped 1.3% to close above $1,286 as rising import prices boosted the dollar stronger dollar, eroding demand for alternative stores of value. The metal was also pressured by reports that President Trump is seriously considering economist John Taylor, a policy hawk, for the new Chair of the Federal Reserve.

US import and export prices rose in September, the Bureau of Labor Statistics reports today, building expectations that higher consumer inflation may be in the pipeline. Imports prices increased 0.7% for the biggest gain in 15 months, while export prices were 0.8% higher. Both rises were largely driven by increased fuel costs.

The dollar gained 0.3% against major rivals as traders speculated that higher trade costs will encourage a rate hike from the Fed in December. CME FedWatch, which tracks the odds of rate increases according to Fed fund futures trading, raised the likelihood to 92%, up from 88% yesterday. Higher rates support the dollar by attracting foreign exchange investment seeking higher yield, weighing on gold and other commodities by making them more expensive in other currencies.

Gold was further pressured by a report from Bloomberg that President Trump is now favoring Stanford's John Taylor to replace Fed Chair Janet Yellen in January. Author of the famous Taylor Rule, which mechanically calculates interest rates according to twin goals of inflation and employment, Taylor would almost certainly push for tighter policy. According to his equation, rates should already be nearly three times the current 1.25%.

The other precious metals were also lower. Silver lost 1.9% while platinum and palladium slid 0.8% and less than 0.1%, respectively.

At the Comex close: December gold dropped $16.80 to $1,286.20; December silver lost 33 cents to $17.04; January platinum slid $7.30 to $934.80; and December palladium dipped 35 cents to $975.95 an ounce.


10/16/2017: Gold dips, holds above $1,300

Source: Bill Musgrave, American Gold Exchange

Austin Gold dipped 0.1% but held above $1,300 as the dollar edged higher, supported by upbeat factory data and expectations that the Federal Reserve will raise interest rates against his year.

Speaking at a Group of 30 banking seminar, Fed Chair Janet Yellen signaled coming rate hikes, saying momentum in economic growth "will warrant gradual increases" in short term rates. She qualified that assessment, however, by acknowledging that persistently low inflation remains a wild card.

The Empire State manufacturing index jumped to a three-year high in October, led by growing optimism in the business sector because of an upturn in the global economy. Exports and manufacturing have lagged other sectors in recovering from the Great Recession.

The dollar ticked up 0.1% against major rivals, pressuring gold and other commodities denominated in it for international trade by making them more expensive to users of other currencies.

The other precious metals finished lower, with silver slipping 0.1% while platinum and palladium dropped 0.2% and 0.9%, respectively.

At the Comex close: December gold dips $1.60 to $1,303; December silver slipped 4 cents to $17.37; January platinum dropped $2.20 to $945.70; December palladium lost $9.20 to $976.30 an ounce.


10/13/2017: Gold posts 2.3% weekly gain

Source: Bill Musgrave, American Gold Exchange

Austin Gold gained 0.6% to surpass the key $1,300 mark, closing at $1,304.70 after weak consumer inflation pressured the dollar and raised questions about another rate hike from the Fed this year. The metal finished the week 2.3% higher. Silver added 0.8% today for a weekly rise of 3.7%.

The Consumer Price Index rose 0.5% in September, its biggest jump in eight months, behind a hurricane-related upsurge in gasoline prices. But the core CPI, which strips out food and energy, rose a meager 0.1%. Annualized core inflation, the measure most tracked by the Fed, was 1.7% for the fifth straight month and remained well-short of the Fed's 2% target.

The dollar fell immediately after the CPI report as traders speculated that the Fed may be less inclined to raise interest rates. The minutes from the September Fed meeting, released this week, showed increasing debate over whether to hike again with inflation stuck so far under target. The buck retraced most of its losses late in the session after President Trump decertified the nuclear agreement with Iran.

Fed Governor Lael Brainard admitted today that the central bank is struggling to understand the causes of persistently low inflation, saying that the decline is probably not the result of temporary or global factors.

Other consumer reports today were more positive but did little to move the markets. Retail sales rose 1.6% for its biggest gain in 30 months in September, and consumer sentiment surged to a 13-year high in October. The Dow and S&P 500 both edged up around 0.1%.

The other precious metals were also higher for the day and week. Platinum added 0.7% for a weekly rise of 3.4%. Palladium rose 1.2% today and 7.2% this week, its biggest weekly win since January.

At the Comex close: December gold gained $8.10 to $1,304.60; December silver climber 15 cents to $17.41; January platinum climber $6.10 to $947.90; and December palladium jumped $10.80 to $985.50 an ounce.


10/12/2017: Gold rises 0.6% to 2-week high

Source: Bill Musgrave, American Gold Exchange

Austin Gold rose 0.6% to close at $1.296.50, its highest finish in more than two weeks, as traders digested yesterday's release of minutes from the Fed's September meeting. The metal reached as high as $1,299.80 in intraday trade before retreating slightly on upbeat US data.

The minutes from the last Fed meeting showed members generally supportive of tighter monetary policy but increasingly concerned about persistently low inflation. Several members said they would like to see core inflation rising to the Fed's 2% target before agreeing to another rate hike.

Further comments from several Fed members have deepened the debate. Esther George of the Kansas City Fed said today that waiting for 2% inflation risks "overheating the economy" and flirting with "an undesirable increase in inflation." James Bullard of the St. Louis Fed, on the other hand, said the Fed must defend its 2% target before raising rates or lose credibility. Similarly, Chicago Fed President Charles Evans said yesterday that another hike is "not a done deal" while inflation is below 2%.

While the markets view a December hike as almost certain, the dovish tone to the Fed minutes and vocal opposition to another hike by some Fed members is giving traders pause, and lending support to gold. Higher rates tend to lift the dollar by attracting foreign exchange investment seeking higher yield. A stronger dollar, in turn, weighs on gold and other commodities priced in it for global trade by making them more expensive overseas.

The dollar added 0.2% against major rivals, limiting gold's rise, after wholesale inflation rose 0.4% in September, boosted by a hurricane-related spike in gasoline prices. The core PPI was softer at 0.2%.

The other precious metals also finished higher, with silver rising 0.8% while platinum and palladium climbed 0.9% and 1.5%, respectively.

At the Comex close: December gold gained $7.60 to $1,296.50; December silver rose 13 cents to $17.27; January platinum picked up $8.60, to $941.80; and December palladium climbed $14.75 to $973.70 an ounce.


10/11/2017: Gold dips, holds after Fed minutes

Source: Bill Musgrave, American Gold Exchange

Austin Gold dipped 0.1% to close under $1,293 as traders prepared for the release of the minutes from the September meeting of the Federal Reserve. The metal then held that slight loss in electronic trade after the minutes confirmed the Fed's bias toward another rate hike.

At their latest meeting on monetary policy, most Fed members felt that another rate hike this year "was likely to be warranted," according to the minutes released today. Persistently low inflation was a hotly-debated topic, with several members urging "some patience" until it climbs closer to the Fed's 2% target. While not automatic, another quarter-point rise in December was clearly the consensus, with only with four members pushing it off until 2018.

Separately, Chicago Fed President Charles Evans said today that a December hike is not a done deal. A policy dove, Evans said he wants "an honest discussion" about whether another rate increase is needed while inflation remains under target.

The minutes did little to move the markets, with a December hike largely a foregone conclusion among traders anyway. CME FedWatch, which forecasts the likelihood of rate hikes based on trading in Fed fund futures, held the odds at 86.7% today, down a hair from 87.8% yesterday.

Gold's slide was backstopped by the dollar's fourth day of losses. The buck slid another 0.2% against major rivals after Catalan's leader balked at declaring formal independence from Spain, boosting the euro.

The other precious metals were mostly lower, with silver and platinum edging down 0.2% and 0.1%, respectively, while palladium gained 1.9%.

At the Comex close: December gold dipped $1.10 to $1,292.70; December silver slipped 3 cents to $17.18; January platinum edged down 50 cents to $935.80; and December palladium gained $16.95 to $951.45 an ounce.


10/10/2017: Gold climbs for third session

Source: Bill Musgrave, American Gold Exchange

Austin Gold gained 0.8% to close near $1,275 as a falling dollar and rising North Korea tensions supported demand for alternative assets. It was the metal's third straight winning session and highest finish in nearly two weeks. Silver rallied 1.4% to extend its four-session rise to 3.4%.

The dollar lost 0.5% against major rivals, posting its third straight losing session, as the pound and euro rose on expectations of tighter monetary policies to come. Upbeat manufacturing and construction data in the UK increased the likelihood of a rate hike from the Bank of England in November. Across the channel, ECB board member Sabine Lautenschlaeger said the central bank should cut back on quantitative easing. Both moves would make the dollar less attractive to foreign exchange traders seeking higher yield.

The dollar was also pressured by ongoing saber-rattling between Donald Trump and Kim Jong-Un after the President tweeted ominously over the weekend that diplomacy is "making fools of U.S. negotiators" and that "only one thing will work!" Defense Secretary Jim Mattis today warned the Army to be ready if negotiations fail to contain North Korea's nuclear ambitions. A weaker dollar supports gold and other commodities by making them less expensive overseas.

Gold was also supported by rising oil prices. Crude gained 2% on reports that Saudi Arabia is cutting exports and the market is beginning to rebalance after years of excess supply. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

Treasurys rose alongside gold and yields fell on flights to safety.

The other precious metals also rose, with platinum and palladium adding 1.6% and 0.7%, respectively.

At the Comex close: December gold gained $9.70 to $1,294.70; December silver jumped 24 cents $17; January platinum climbed $15.10 to $936.50; and December palladium added $6.50, to $934.50 an ounce.

  

Metal Ask      Change
Gold $1,281.36           $-9.42
Silver $17.11           $-0.21
Platinum $927.14           $-1.22
Palladium $985.45           $15.40

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