Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.3% to close above $1,993 as expectations that the Fed is done with rate hikes rates pressured yields and the dollar, boosting alternative stores of value.

Yesterday, the Fed left interest rates unchanged for the second straight meeting, acknowledging that the highest borrowing costs in 22 years will continue to work through the economy and weigh on households and businesses.

Although Fed Chair Jerome Powell, in yesterday’s post-meeting presser, left the option open for another rate increase, he also refrained from warning that rates will remain “higher for longer,” something he has said repeatedly in recent months.

On this relatively flimsy evidence, traders are speculating that the most aggressive rate-hike cycle since the 1970s has finally come to an end. And while rates are not imminently bound to decline, they are not likely to rise further, either.

CME FedWatch places the odds of a December increase at under 20%, less than half of what they were a month ago, and the likelihood of rate cut by July at more than 60%.

Wall Street ran with the dovish interpretation, lifting all three major indexes more than 1.7%.

Benchmark 10-year Treasury yields fell back toward 4.65%, a three-week low, after jobless and productivity data reinforcing the idea that the Fed may be done. Falling yields lift gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

First-time unemployment claims climbed to a seven-week high, suggesting some softening in the labor market. US productivity surged in Q# at the fastest rate in three years, lowering unit labor cost and easing some inflationary pressure.

The dollar dropped 0.7% as Forex traders shifted toward riskier currencies. A falling buck helps gold and other commodities by making them cheaper overseas.

The other precious metals were mixed, with silver adding 0.3% while platinum was nearly flat and palladium slipped 0.3%.

At the Comex close: December gold gained $6, to $1,993.50; December silver picked up 6 cents to $22.85; January platinum added 20 cents, to $930.60; and December palladium edged down $3.60 to $1,110.60 an ounce.