Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold fell 1% to close at a one-week low under $1,794 after upbeat data and sharply higher inflation rallied the dollar, undermining alternative stores of value. The metal lost 0.7% on the week but still notched a monthly rise of 1.5%, its biggest since July.

Consumer spending increased 0.6% in September, slightly more than forecast, and August spending was revised up to 1% from 0.8%. The increases bode well for growth in the fourth quarter after GDP tumbled to just 2% in Q3. Consumer spending accounts for roughly two-thirds of US economic activity.

Americans dipped into savings to fuel their purchases, however, after personal income dropped 1% in September and the savings rate fell to 7.5%, down from 9.2% the month before. And consumer sentiment is hovering near pandemic lows, according to the University of Michigan survey, burdened by inflation worries.

The Fed's preferred inflation gauge, the PCE index, rose to 4.4% in September, well above its target 2%. The so-called core PCE, stripping out food and energy, held steady at 3.6%.

The dollar jumped more than 0.8% against major rivals as traders speculated that the sharply higher PCE inflation numbers may spur the Fed to taper monetary easing more quickly. A rising dollar pressures gold and other commodities priced in it for global trade by making it more expensive in other currencies.

The Fed was already widely expected to begin tapering its bond-buying program, known as quantitative easing, when it meets next week. The higher inflation data may encourage the central bank to accelerate the taper so that it can begin raising interest rates sooner to choke off inflation.

The other precious metals were lower for the day and week but higher for the month. Silver fell 0.7% today and 2.1% this week, but still rallied 8.6% in October. Platinum dropped 0.3% today for a weekly decline of 3% but gained 6.1% this month. Palladium lost 0.5% on the day and 2.7% on the week, but still rose 4.2% in October.

At the Comex close: December gold dropped $18.70 to $1,783.90; December silver slid 17 cents to $23.95; January platinum dipped $3.30 to $1,020.70; and December palladium lost $9.10 to $1,980.30 an ounce.