Gold News & Info

Source:Bill Musgrave, American Gold Exchange

Austin— Gold fell 0.7% to close at a nine-month low under $1,209 as the dollar rallied for the tenth straight day, dulling demand for alternative stores of value. The metal lost 1.3% on the week for its second weekly loss in a row.

The dollar added another 0.3% against major rivals, hitting a 13-year high, as traders speculate that a Trump presidency will accelerate the pace of interest rate increases from the Fed. The dollar has now gained 4% in the past two weeks, pressuring gold and other commodities denominated in it for international trade by making them more expensive overseas.

Campaign promises of deregulation and tax cuts, along with massive economic stimulus through infrastructure construction, have the potential to increase inflation dramatically and push the central bank to normalize rate policy more rapidly than previously expected. With the ECB and BOJ continuing their programs of monetary easing, forex investment is departing the euro and yen in search of higher yields, bidding up the dollar.

Adding to the buck's speculative momentum, the Conference Board reported its leading economic indicators edged up 0.1% in November, suggesting continued economic growth in Q1 of next year.

While the threat of rising inflation may pressure gold in the short term by boosting the dollar, it has the potential to be bullish for the metal in the longer term as investors seek out inflation hedges.

The other precious metals were down for the day but mixed for the week. Silver dropped 0.9% to close the week with a 4.4% loss. Platinum lost 2.4% today and 2.2% this week. Palladium slipped 0.3% but ended the week 6.3% higher.

At the Comex close: December delivery fell $8.20 to $1,208.70; December silver dropped 15 cents to $16.62; January platinum slid $23.10 to $922; and December palladium shed $1.85 to $727.80 an ounce.