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


11/30/2021: Gold retreats after hawkish Powell

Source: Bill Musgrave, American Gold Exchange

Austin — Gold fell 0.5% to close under $1,777 after hawkish comments from Fed Chair Jerome Powell reversed an early-session rally driven by weak US data and concerns about the Omicron variant. The metal had risen above $1,811 before retreating into a monthly decline of 0.4%.

Speaking to the Senate Banking Committee, Powell said the Fed will consider accelerating its taper of quantitative easing when it meets in December, citing the strong economy and high inflation as reasons to end the emergency program earlier than planned.

The Fed voted in November to reduce its $120 billion-per-month easing program by $15 billion, with similar reductions expected monthly. Most Fed watchers believe the amount is likely double to $30 billion per month, ending the program by March.

The end of QE is considered a prerequisite for raising interest rates, the Fed's favorite tool for combating inflation.

Gold was rallying strongly for most of the session, picking up around 1.3% before Powell's comments reversed the trade. Tighter monetary policies typically strengthen the dollar and lift bond yields, both of which weigh on the gold price.

Safe-haven demand drove the initial gains for gold after Moderna CEO Stéphane Bancel said current vaccines will be less effective against the Omicron variant. Separately, Regeneron and Lilly said their antibody treatments for covid are likely to be vulnerable because of mutations in its spike proteins.

Adding to risk off sentiment, the Chicago PMI for business condition dropped in November to the lowest level in nine months and the Conference Board's gauge of consumer confidence also tumbled to nine-month low. Inflation and renewed pandemic concerns were the drivers in both cases.

The downbeat data, variant news, and taper talk all combined to hammer Wall Street. The Dow and S&P 500 lost 1.9% each while the Nasdaq fell 1.6%.

Gold's late slide was backstopped by a weaker dollar, which fell sharply against safe-haven currencies like the yen and Swiss franc. A falling dollar supports gold and other commodities by making the less expensive in other currencies.

The other precious metals were also lower for the day and month. Silver slid 0.2% for a monthly decline of 4.7%. Platinum tumbled 3.9% today and 9.2% this month. Palladium shed 4.7% for a whopping monthly loss of 13.9%.

At the Comex close: February gold fell $8.70 to $1,776.50; March silver dipped 4 cents to $22.82; January platinum dropped $37.20 to $927.30; and March palladium jettisoned $83.70 to $1,705.50 an ounce.


11/29/2021: Gold slips as Omicron fears ease

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slipped 0.2% to close under $1,786 after easing concerns about the Omicron coronavirus variant lifted stocks and the dollar, pressuring alternative assets.

In a televised address, President Biden helped to quell anxiety by reassuring Americans—and the markets—that combating the aggressive new covid strain will not involve "lockdowns or shutdowns." A detailed strategy will be presented on Thursday.

Detected in at least a dozen countries, Omicron has a number of mutations that could possibly make it far more transmissible than the Delta variant. Several nations banned travel from South Africa, where it was first discovered.

Biden's reassurance that the US will not return to the drastic policies of earlier in the pandemic rallied Wall Street after its sharp tumble on Friday. The Dow and S&P 500 rose 1% and 1.5%, respectively, while the Nasdaq jumped 2%.

Adding to risk appetite, pending home sales surged 7.5% in October compared to the month before, more than ten times most forecasts.

The dollar rose 0.2% against major rivals as risk appetite returned, pressuring safe-haven currencies like the yen and Swiss franc. A stronger dollar weighs on gold and other commodities by making them prices in other currencies, curtailing overseas demand.

The other precious metals were mixed, with silver dropping 1.2% while platinum and palladium added 1.1% and 0.5%, respectively.

At the Comex close: February gold slipped $2.90 to $1,785.20; March silver fell 28 cents to $22.85; January platinum combed $10.20 to $964.50; and March palladium picked up $8 to $1,789.20 an ounce.


11/24/2021: Gold rises with PCE index

Source: Bill Musgrave, American Gold Exchange

Austin — Gold rose than 0.1% to close above $1,784 on demand for inflation hedges after another key gauge showed prices rising at the fastest pace in decades. The metal ended a four-session losing streak despite a spate of strong US economic data as bargain-hunters returned to the market.

The Fed's preferred inflation gauge, the PCE index, jumped another 0.6% in October, pushing the annualized inflation rate to 5%, the highest since December 1990. The so-called core rate, excluding volatile food and energy costs, rose to 4.1%, also the most in 31 years.

Despite roaring inflation, consumer spending surged last month by 1.3%, handily more than forecasts. While 0.7% of the increase, roughly half, was attributable to higher prices paid, the jump signals renewed vigor in the economy to close the year. Consumer spending comprises around 70% of GDP.

Separately, the Commerce Department said the economy grew at a revised 2.1% in Q3, up from 2% initially reported, with consumer spending accounting for most of the revision.

First-time jobless claims fell by 71,000 to just 199,000 last week, the lowest level since 1969. Given the strong labor market and stronger inflation, more Fed members are advocating a quicker end to emergency monetary stimulus.

San Francisco Fed President Mary Daly said today that a faster taper would be appropriate if jobs and inflation data continue at current levels. Vice Chair Richard Clarida has already recommended speeding up the taper when the Fed meets in December.

The dollar rose 0.4% against major rivals on speculation that the Fed will, indeed, accelerate the end of its bond buying program and raise interest rates by June. Higher rates lift the dollar by attracting Forex investors seeking higher yield.

Also supporting the buck, the ECB has indicated that it will not raise interest rates in the near future because of slower Eurozone growth. The prospective divergence in monetary policy weakened the euro to a 16-month low against the dollar.

A stronger dollar typically weighs on gold and other commodities by making them prices in other currencies.

The other precious metals were mostly higher, with silver and platinum adding 0.3% and 1.3%, respectively, while palladium slid 0.1%.

At the Comex close: December gold gained 50 cents to $1,784.30; December silver climbed 6 cents to $23.50; January platinum added $11.10, to $975.30; and December palladium lost $2.40 to $1,847.90 an ounce.


11/23/2021: Gold falls as yields rise on Powell

Source: Bill Musgrave, American Gold Exchange

Austin — Gold fell another 1.2% to close under $1,784 as Treasury yields continued to climb on Fed Chair Jerome Powell's nomination for a second term. A combined loss of 3.6% over two sessions pushed the metal to its lowest finish in three-weeks.

Treasury yields jumped again to a month high above 1.66% on bets that Powell's renomination has given him a mandate to speed up the taper of monetary easing announced earlier this month.

Underscoring the hawkish speculation, Atlanta Fed President Raphael Bostic said today that "there are good arguments to be made" to consider a faster elimination of monetary easing, especially if inflation and employment readings rise further. Bostic advocates raising rates once in 2022.

The conclusion of the $120 billion-per-month easing program is seen the first step toward raising interest rates, the Fed's favorite tool for curbing inflation.

Gold typically thrives as long-term store of value during periods of sharply higher inflation. But rising interest rates and Treasury yields create headwinds for the metal by increasing the opportunity costs for holding it instead of bonds as a safe-haven asset.

Strong economic data also pressured the gold price. IHS Markit's flash PMI for manufacturing rose to 59.1 in November, up from 58.4 in October, while the services gauge dipped slightly to 57. With anything above 50 showing expansion, both readings signaled ongoing momentum in Q4.

The other precious metals were also sharply lower, with silver dropping 3.6% while platinum and palladium fell 5% and 5.1%, respectively.

At the Comex close: December gold shed $22.50 to $1,783.80; December silver lost 87 cents to $23.45; January platinum shed $50.90 to $964.20; and December palladium dumped $100.30 to $1,850.30 an ounce.


11/22/2021: Gold plunges on Powell pick

Source: Bill Musgrave, American Gold Exchange

Austin — Gold plunged 2.4% to close under $1,807 after Fed Chair Powell's nomination for a second term stoked equities, yields, and the dollar, undermining demand for alternative stores of value.

Ending weeks of speculation, President Biden picked Jerome Powell for a second term at the Fed's helm, choosing him over Fed Governor Lael Brainard, the more dovish finalist. The move was widely seen as a vote for stability in the process of guiding the economy though the pandemic crisis. Brainard was named for the Vice Chair role.

Wall Street cheered the choice of Powell, a Republican with ties to the financial industry and a softer approach to regulation than Brainard. Bank stocks led the rally, lifting the Dow and S&P 500 by 0.9% and 0.7%, respective, while the tech-heavy Nasdaq was nearly flat.

Bonds sold off with the rise in risk appetite, pushing benchmark 10-year Treasury yields up to 1.635%. Rising yields increase to opportunity cost for holding gold, a non-yielding asset, instead of bonds.

The dollar added 0.5% against major rivals and hit a new 16-month high versus the euro as Forex traders bet that rate hikes to curtail inflation are more likely under Powell. A stronger dollar weighs on gold and other commodities by making them pricier in other currencies.

The other precious metals were also sharply lower, with silver and platinum dropping 2% each while palladium plunged 5.9%.

At the Comex close: December gold fell $45.30 to $1,806.30; December silver dropped 48 cents to at $24.30; January platinum shed $20.90 to $1,015.10; and December palladium surrendered $122.60, to $1,950.60 an ounce.


11/19/2021: Gold slips on hawkish Fed speak

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slipped 0.5% to close at a one-week low under $1,852 after hawkish Fed speakers and rising Covid cases lifted the dollar, undercutting alternative stores of value. For the week, gold was down 0.9%.

Several prominent Federal Reserve officials spoke out today in favor of accelerating the removal of pandemic aid as the first step toward raising interest rates to combat inflation. Fed Vice Chair Richard Clarida said it "may very well be appropriate" discuss speeding up the taper at the next Fed meeting in December.

Separately, Fed Governor Christopher Waller said the improving labor market and "deteriorating inflation data" have pushed him to consider "a faster pace of tapering," perhaps by April. Under current Fed guidance, the end of quantitative easing would occur around July 2022.

Yesterday, Atlanta Fed President Raphael Bostic said the central bank could start raising interest rates by mid-2022 if the economy is back to full employment.

The dollar jumped 0.6% after the hawkish Fed speak, pressuring gold and other commodities priced in it for global trade by making them more expensive in other currencies.

The buck was also buoyed by a sharp fall in the euro after Austria announced full lockdown to control escalating Covid infections, and Germany signaled that it may follow.

Gold was further pressured by tumbling oil prices as traders speculated that the resurgent pandemic in Europe will reduce demand. WTI crude fell 3.7% to a seven-week low just above $76 per barrel. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were also lower fo the day and week. Silver dropped 0.5% for a weekly loss of 2.2%. Platinum fell 1.9% today and 4.9% this week. Palladium was 3% lower for a weekly decline of 2.1%.

At the Comex close: December gold sipped by $9.80 to $1,851.60; December silver fell 12 cents to $24.78; January platinum dropped $20.40 to $1,036; and December palladium shed $64.20 to $2,073.20 an ounce.


11/18/2021: Gold slides on data, rate view

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slid 0.5% to close above $1,861 after solid economic data reinforced speculation that the Fed may raise interest rates sooner than expected, nudging traders to take profits from yesterday rise to a fresh five-month high above $1,870.

The Philadelphia Fed manufacturing index was far stronger than expected in November, surging to 39 from 28.3 in October, where anything over zero indicates expansion. Following a weak reading for New York's Empire State index during the same period, economists were forecasting around 22.

In addition, first-time jobless claims dropped last week to a pandemic low of 268,000. While most forecasts expected a deeper cut to 260,000, the total still indicated an encouraging reduction in layoffs due to the Delta variant.

Two prominent Fed officials downplayed inflation today while signaling the possibility of at least one rate hike in mid-2022. Renowned policy dove Charles Evans of the Chicago Fed said he expects inflation to drop back to 2% by the end of next year as supply-chain issues are "rectified," but remains "open-minded" about hikes if needed.

Separately, New York Fed President John Williams defended the central bank's policy of letting inflation run above 2% for an expended period, known as "inflation averaging," before intervening with rate hikes. But he acknowledged that prices have risen more broadly than anticipated.

Gold's slide was backstopped by a weaker dollar, which fell 0.3% against major rivals as Forex traders took profits from the buck's recent rally to a 16-month high. A weaker dollar makes gold less expensive overseas.

The other precious metals were Also lower, with silver losing 1.1% while platinum and palladium declined 1.2% and 2.2%, respectively.

At the Comex close: December gold slipped $8.80 to $1,861.40; December silver dropped 27 cents to $24.90; December platinum shed $12.70 to $1,056.40; and December palladium dumped $47.10 to $2,137.40 an ounce.


11/17/2021: Gold rebounds on inflation worries

Source: Bill Musgrave, American Gold Exchange

Austin — Gold recouped 0.9% to close above $1,870 as inflation worries and a weaker dollar boosted demand for alternative stores of value. After a two-session pause for profit-taking, it was the metal's highest finish since early June.

Prices for US imports rose 1.2% last month, three times the September increase, according to BLS data released yesterday. This data comes after last week's CPI release showed consumer inflation rising nearly 1% in October for an annualized 6.2%, the hottest in three decades and more than three times the Fed's target 2%.

Fed Chair Jerome Powell is still preaching patience, saying sharply higher prices are a "transitory" effect of temporary supply-chain bottlenecks.

But the markets are not so sure. Momentum for gold continues to mount on concerns that the Federal Reserve is behind the curve on rising prices. The metal has now risen in eight of the past ten trading days, surging more than 5% over that stretch.

Soft housing data also supported safe-haven buying today after new home construction fell 0.7% in October, hampered by shortages of materials and labor.

Wall Street pulled back, with the Dow dropping 0.5% while the S&P 500 and Nasdaq slipped 0.2% each. Benchmark 10-year treasury yields also decline, dipping back under 1.6% on flights to safety and supporting gold by reducing the opportunity cost for holding it instead of bonds.

The dollar dipped 0.1% against major rivals led by the pound and Canadian dollar after surging inflation in the UK and Canada increased the odds of rate hikes by their respective central banks. Data released today showed inflation at a 10-year high in Britain and an 18-year high in Canada.

The other precious metals were mostly higher, with silver and palladium rising 0.9% and 0.8%, respectively, while platinum slid 0.5%.

At the Comex close: December gold gained $16.10 to $1,870.20; December silver climbed 22 cents to $25.17; January platinum dipped $5.40 to $1,069.10; and December palladium rose $16.90 to $2,184.50 an ounce.


11/16/2021: Gold slides after upbeat data

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slid 0.7% to close below $1,855 after strong retail and industrial data boosted equities and the dollar, dulling demand for alternative assets. The metal jumped above $1,879 in intraday trading, the highest level in more than five months, before pulling back on profit-taking.

US retail sales surged 1.7% in October, the fastest pace in seven-months, as consumers got a head start on holiday shopping to avoid possible shortages caused by snarled supply chains. Consumer spending accounts for nearly 70% of GDP.

However, roughly half of the sales increase was attributed to sharply higher prices. Retail sales are calculated in dollars spent. The government reported past week that the CPI increased nearly 1% in October, raising the cost of everything from clothing and electronics to food and gas.

Separately, the Fed reported US industrial output rose 1.6% last month after falling 1.1% in September. Manufacturing rose 1.3% to hit its highest level since March 2019. But roughly half the increase reflected recovery from Hurricane Ida along the Gulf Coast, which caused a 1.1% drop in September.

Wall Street applauded the upbeat data, with all three major indexes rising on hopes for stronger economic growth in Q4. The Dow picked up 0.3% while the S&P 500 and Nasdaq rose 0.5% and 0.8%.

Benchmark 10-year Treasury yields rose above 1.63% as heightened risk appetite caused investors to shift from bonds the stocks.

The dollar picked up another 0.5% to hit a fresh 16-month high as traders speculated that the improving data could lead the Fed a tighten monetary policy more quickly. Also lifting the buck, the euro slumped on rapidly rising Covid cases in the Eurozone. In addition, ECB chief Christine Lagarde said yesterday that raising interest rates to combat inflation would smother the recovery.

A stronger dollar typically weighs on gold and other commodities by making them more expensive in other currencies, depressing demand overseas.

The other precious metals were mostly lower, with silver and platinum dropping 0.6% and 2%, respectively, while palladium added 0.5%.

At the Comex close: December gold dropped $12.50 to $1,854.10; December silver slid 16 cents to $24.94; January platinum fell $22.40 to $1,074.50; and December palladium rose $11.50 to $2,167.60 an ounce.


11/15/2021: Gold dips on dollar, data

Source: Bill Musgrave, American Gold Exchange

Austin — Gold dipped 0.1% to close under $1,867 as upbeat factory data and strength in yields and the dollar prompted traders to take profits from its seven-day rally.

New York's Empire State manufacturing index, often read as an early gauge of national business conditions, rose sharply in November to more than 30 points. Shipments jumped nearly 20 points and new orders 4.5, with any reading above zero indicating growth. Optimism for the future six months dipped, however, on inflation and supply-chain worries.

The dollar added 0.4% to a new 16-month high as traders speculated that the strongest inflation rise in 31 years will force the Federal Reserve to tighten monetary policy more quickly than expected. Higher rates lift the buck by attracting Forex investors seeking higher yield, weighing on gold and other commodities by making them pricier overseas.

Benchmark 10-year Treasury yields also rose on inflation concerns, pushing above 1.62% after last week's pullback under 1.5%. Rising inflation expectations spur bond investors to sell low-yielding bonds, demanding greater returns for tying up money that will lose purchasing power in the future.

Gold surged nearly 3% last week, its strongest weekly rise in five months, as the latest consumer price index showed prices rising at an annualized 6.2%, the fastest in three decades. Gold is often sought as a hedge against loss of purchasing power due to sharply higher inflation.

The other precious metals were mixed, with silver slipping 0.9% while platinum and palladium added 0.7% and 1.8%, respectively.

At the Comex close: December gold dipped $1.90 to $1,866.60; December silver dropped 24 cents to $25.11; January platinum picked up $7.70 to $1,096.90; and December palladium climbed $38.40 to $2,156.10 an ounce.

  

Metal Ask      Change
Gold $1,785.09           Price Change Up Arrow $7.69
Silver $22.99           Price Change Up Arrow $0.05
Platinum $961.11           Price Change Up Arrow $14.12
Palladium $1,777.26           Price Change Up Arrow $9.26
In US Dollars

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