Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinPressured by a rising dollar, gold slipped 0.6% to close below $1,995 on profit-taking ahead of tomorrow’s decision on interest rates by the Fed. The metal finished October with a gain of nearly 7%, scoring its best month since March on flights to safety because of the Middle East conflict.

The Fed commenced a two-day meeting on policy today, balancing mixed US data against rising geopolitical risks that could hamper global growth and complicate the fight against inflation. Investors will scour every word in the FOMC policy statement and Fed Chair Jerome Powell’s post-meeting comments for hawkish or dovish clues.

While the central bankers are almost certain to hold rates steady this meeting, the odds of a December hike stand at 25%, according to CME FedWatch. The chances of a rate cut by next July are around 60%.

US labor costs jumped 1.1% in Q3, according to the Employment Cost Index, and prices for US homes accelerated in August for the third straight month. Both prints show a resilient economy that could induce the Fed to hold rates higher for longer.

But complicating the outlook, US consumer confidence tumbled to a five-month low this month as Americans fret over higher interest rates, inflation, and the Hamas-Israel war. The Chicago PMI fell deeper into the negative in October, marking 14 straight months in contraction. And China’s official manufacturing PMI dropped back into contraction in September, auguring ill for global growth.

The dollar jumped 0.5% against major rivals while the yen plunged to a one-year low after the BOJ failed to deliver a substantial move to support bond yields. A rising buck pressures gold and other commodities by making them pricier in other currencies.

Forex traders were expecting the yield curve control on 10-year Japan government bonds to be raised to 1% from zero. Instead, the BOJ merely redefined 1% as a loose “upper bound,” holding to its ultraloose monetary policy.

The World Gold Council reported global central banks purchased 800,000 metric tons of gold, a new record, during the first nine months of the year. Like individual investors, central banks hold gold as an inflation hedge, to diversify currency risk, and as insurance against times of crisis.

The other precious metals were mostly lower for the session and mostly higher for the month. Silver fell 1.9% today but rose 2.2% in October. Platinum added 0.5% for a monthly rise of 3.2%. Palladium lost 1.1% for a monthly loss of 10.3%.

At the Comex close: December gold slipped $11.30 to $1,994.30; December silver shed 44 cents to $22.95; January platinum picked up $5 to $944.90; and December palladium lost $12.20 to $1,126.10 an ounce.