Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold slipped 0.3% to close under $1,794 as the dollar rose behind strong bond yields and the possibility that the Fed might taper quantitative easing as early as next month.

St. Louis Fed President James Bullard said again that the central bank should move towards reducing pandemic-related support by cutting the bond-buying program known as quantitative easing, perhaps at the Fed's September meeting.

Momentum in the economy will drive an improving labor market despite last month's nonfarm payrolls report showing a paltry 225,000 new jobs added, Bullard said. In addition, failure to scale back the $120 monthly bond purchases soon will accelerate inflation, in his view.

New York Fed President John Williams pushed back on the early taper call, however, stating that the labor market has yet to cross the threshold to where it no longer needs help. Williams is currently a voting member of the FOMC whereas Bullard is not.

Tantamount to printing money, quantitative easing supports gold by pressuring bond yields. Scaling it back, conversely, could pressure the gold price by lifting yields and increasing the opportunity cost for holding the metal.

Benchmark 10-year Treasury yields dipped slightly from its highest level in two months as bargain hunters swept to buy undervalued government debt. The Fed's Beige Book, released late in the session, also prompted some safe-haven buying as economic activity last month slowed to moderate in much of the country because of the Delta variant.

The dollar rose 0.2% against major rivals, especially the euro, ahead of tomorrow's meeting of the European Central Bank. A rising dollar weighs on gold by making it more expensive overseas.

The other precious metals were also lower, with silver dropping 1.3% while platinum and palladium fell 2% and 4.9%, respectively.

At the Comex close: December gold slipped $5 to $1,793.50; December silver dropped 32 cents to $24.06; October platinum fell $19.80 to $976.10; and December palladium shed $116.20 to $2,237.30 an ounce.