Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold rose another 0.2% to close at a new two-month high above $1,830 after sharply higher wholesale inflation, lower yields, and a falling dollar lifted demand for alternative stores of value. It was the metal's fourth consecutive higher finish.

The US producer price index rose 0.6% in October, keeping the pace of wholesale inflation over the past 12 months at 8.6%, the highest level in decades. The cost of energy and food led the way but so-called core prices, factoring out these volatile categories, still increased by 0.4%.

Rapidly escalating inflation was a key reason why small business owners are becoming pessimistic. The NFIB optimism index fell to a seven-month low in October as businesses face persistent difficulties in obtaining materials and labor, driving up costs.

Despite the inflation numbers, prominent Fed officials signaled today that interest rates are likely to remain unchanged, at least in the near term. Fed Chair Jerome Powell reiterated that inflation is transitory and full employment is the goal, suggesting the central will continue to prioritize job gains over price stability in its dual mandate.

Separately, regional Fed Presidents Mary Daly and Neil Kashkari reinforced Powell's dovish message, saying real clarity on inflation and the state of the labor market won’t be gained until mid-2022 at the earliest.

Wall Street stumbled, with all three major indexes pulling back as investors became increasingly worried about inflation ahead of tomorrow's CPI release.

Benchmark 10-year Treasury yields fell again, dropping below 1.44%, with investors seeking safe-haven assets. Falling yields support gold by decreasing the opportunity cost for holding it instead of bonds.

The dollar also pulled back, slipping of 0.1% after the dovish Fed messaging. A weaker dollar typically helps gold and other commodities by making them less expensive overseas.

The other precious metals were mixed, with platinum edging up 0.1% while silver and palladium slid 0.9% and 2.7%, respectively.

At the Comex close: December gold gained $2.80 to $1,830.80; December silver dropped 22 cents to $24.32; January platinum picked up $1.40 to $1,061.40; and December palladium fell $55.60 to $2,022.10 an ounce.