Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold rose 0.2% to close above $1,788 as sharply higher inflation and concerns about the omicron variant pressured equities and yields, fueling demand for alternative assets. It was the metal's highest finish in three weeks.

Appetite for inflation hedges continued after Friday's release of the Consumer Price Index for November showed annualized inflation spiking to 6.8%, the highest in 40 years.

While the Fed is expected to accelerate its taper of monetary easing at this week's meeting, it is highly unlikely to raise interest rates before next spring, when emergency easing is fully withdrawn. Raising rates is the Fed's most effective tool for curbing inflation.

Meanwhile, the aggressive spread of the highly transmissible omicron covid variant is clouding the global pandemic outlook. In the UK, infections are doubling every two to three days. PM Boris Johnson has called for new restrictions, warning of an "omicron tidal wave." The new strain has been identified in 30 states in the US.

Wall Street pulled back on omicron concerns, with the Dow and S&P 500 dropping 0.7% while the Nasdaq lost 1%. Expectation the Fed will announce a faster taper of easing also weighed on risk appetite.

Benchmark 10-year Treasury yields dropped below 1.43% as more investors sought safety. Lower rates support gold by reducing the opportunity cost for holding it instead of bonds a s a safe-haven asset.

Capping gold's gains, the dollar added 0.2% against major rivals as the UK pound fell on the growing omicron threat. The euro lost on expectations that the Fed will taper asset purchases more quickly than the ECB. A rising dollar pressures gold and other commodities by making them pricier overseas.

The other precious metals were mixed, with silver adding 0.6% while platinum and palladium fell 1% and 4.3%, respectively.

At the Comex close: February gold gained $3.50 to $1,788.30; March silver added 13 cents, to $22.33; January platinum slid $9.60 to $924.60; and March palladium lost $75.10 to $1,674.70 an ounce.