Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinExtending its rally to seven days, gold picked up another 0.3% to close above $1,868 after weak consumer data combined with inflation fears to drive investors into safe havens. The metal gained 2.9% for the week to notch its biggest weekly win since early May.

Consumer sentiment tumbled in November to the lowest point in a decade, with Americans increasingly worried about rising inflation and falling real earnings. The University of Michigan survey's reading of 66.8 was the lowest since November 2011, when unemployment was 8.6%.

With consumer spending in the third quarter an anemic 1.2%, falling consumer sentiment heading into the holiday season bodes ill for GDP. Consumer spending constitutes roughly 70% of US economy.

The dollar fell back 0.1% on the sentiment report as traders speculated that a weakening recovery could hamstring the Fed in its efforts to control inflation by reducing stimulus and eventually raising interest rates. A falling dollar lifts gold and other commodities by making them less expensive in other currencies, supporting overseas demand.

Benchmark 10-year Treasury yields also declined, dipping back under 1.54%, on flight to safety. Falling yield help gold by reducing the opportunity cost for holding it instead of bonds.

Gold enjoyed its best week in more than five months as investors realize that inflation is likely to remain high for an extended period. This week's CPI print showed consumer prices surged 0.9% in October for an annual rate of 6.2%, the strongest in more than 30 years. Gold is often sought as a hedge against inflation.

The other precious metals were mixed for the day but higher for the week. Silver added 0.2% for a weekly increase of 4.9%. Platinum dipped 0.5% today but rose 5.2% this week. Palladium added 2.7% for a weekly gain of 4.4%.

At the Comex close: December gold gained $4.60 to $1,868.50; December silver picked up a nickel to 25.35; January platinum dipped $5.30 to $1,089.20; and December palladium climbed $55.10 to $2,117.70 an ounce.