Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold slid 0.5% to close under $1,937 as Treasury yields and the dollar continued to rise on expectations that the Fed will keep interest rates higher for longer.

Although the Fed held rates unchanged at their policy meeting last week, the clear message from Fed Chair Jerome Powell and his colleagues was that they still see inflation as a stubborn threat. In his post-meeting presser, Powell emphasized that rates are likely to go higher and stay high until inflation falls closer to the 2% target.

Perhaps more to the point, the Fed's quarterly-updated "dot plot" forecast showed a majority of committee members expecting to raise interest rates by another quarter-point this year with only a half-point cut in 2024, down from a full point in the June forecast, lowering the rate into a range between 4.75% and 5%.

Several prominent Fed officials reiterated this hawkish outlook in speeches late past week. But the Fed fund futures market is skeptical. The odds of a quarter-point increase this year stand at just 34%, according to CME FedWatch, while the policy rate is projected to be just 4.61% by December 2024.

Still, benchmark 10-year Treasury yields jumped to a fresh 16-year above 4.5% on the hawkish Fed talk, pressuring gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar tracked higher with yields, adding 0.3% against major rivals as the yen hit an 11-year low after the BOJ held fast to its ultra-loose monetary policy last Friday. A stronger dollar weighs on gold and other commodities by making them pricier in other currencies.

Gold's losses were backstopped by growing concerns that a cadre of Republicans in Congress will force a government shutdown at the end of the month with potentially damaging consequences for the economy. Moody's warned today that a shutdown would be "credit-negative," making it more difficult for the US to shoulder its enormous debt load.

The other precious metals were also lower, with silver and palladium dropping 1.9% each while platinum fell 1.8%.

At the Comex close: December gold slipped $9 to $1,936.60; December silver fell 45 cents to $23.39; October platinum dropped $16.60 to $917.50; and December palladium shed $24.10 to $1,232 an ounce.