Gold Up Despite Stronger Dollar

Gold Up Despite Stronger Dollar

Gold ticks up on continuing inflation concerns despite stronger dollar. Gold slightly dropped in early morning trading, but was buoyed back up when bulls bought the dip, even though the dollar is hovering near a 16-month high.

The dollar advanced after U.S. retail sales beat expectations for October in a report released Tuesday. Investors saw that as an indicator that soaring inflation isn’t yet reducing spending, even as a key consumer confidence indicator missed expectations.

December gold futures dropped 0.7% Tuesday to settle at $1,854.10 an ounce on Comex. The front-month contract retreated 0.8% in the first two days of the week. Gold advanced 1.5% in October after retreating 3.4% in September. The yellow metal is down 2.2% so far in 2021. The December contract is currently up $12.80 an ounce to $1,866.60 and the DG spot price is $1,867.90.

U.S. retail sales rose 1.7% in October, a faster rate than the 0.8% reported for the previous month, according to Commerce Department data. Economists surveyed by Dow Jones had anticipated a 1.5% increase. U.S. industrial production also beat expectations last month, according to a separate data release Tuesday from the Fed. It rose at a seasonally adjusted 1.6% from the previous month, surpassing expectations of a 0.8% gain.

But U.S. consumer confidence tumbled to a 10-year low in November amid soaring inflation, according to the University of Michigan’s consumer sentiment index.

That’s a “level that you might associate with a recession,” Richmond Federal Reserve President Thomas Barkin said Tuesday during a virtual Treasury conference. Investors will be keeping an eye and ear looking for insights into U.S Federal Reserve actions as all Fed presidents speak over the next three days at the conference.

U.S. consumer prices jumped 6.2% in October, the biggest surge in more than 30 years, the Labor Department reported last week, triggering increased speculation that inflation may spur the Fed and other central banks to boost interest rates, which would be bearish for gold.

In additional economic news this week, data on housing starts come out Wednesday, and Thursday brings weekly initial jobless claims and the index of leading economic indicators for October.

December silver futures decreased 0.6% Tuesday to settle at $24.94 an ounce on Comex. The front-month contract lost 1.6% in the first two days of the week. Silver rose 8.6% last month after dropping 8.2% in September, its fourth consecutive monthly decline. The metal is down 5.6% so far this year. Silver prices are tied to industrial demand. The December contract is currently up $0.201 (+0.85%) an ounce to $25.145 and the DG spot price is $25.19.

Spot palladium gained 0.6% Tuesday to $2,186.50 an ounce and up 2.3% so far this week. It rallied 4.3% in October after declining 23% in September. It’s down 11% so far in 2021. The DG spot price is currently up $2.90 an ounce to $2,185.50.

Spot platinum fell 2.3% Tuesday to $1,071.50 an ounce and retreated 2% in the first two days of this week. The metal rose 6% in October after losing 5.3% in September. It’s down 0.2% so far this year. Currently, the DG spot price has ticked down $1.40 an ounce to $1,073.10.


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