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Daily Gold Update
Current precious metals news

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Daily Gold Update presents a recap on today's action in the precious metals markets. View archives.


August 28: Gold gains 1% on bargain-hunting

Source: Bill Musgrave, American Gold Exchange

Austin -- Gold gained 1% to close at $1,134 as bargain-hunters returned to the market and prospects dimmed for a September rate hike. The metal still finished the week 2.2% lower, surrendering roughly half of last week's 4.2% rise after upbeat U.S. economic data caused a rebound in stocks and reduced safe-haven demand.

The Commerce Department said today that consumer spending ticked up 0.3% in July, led by auto sales, and was revised slightly higher in June. Following yesterday's GDP revision to 3.7% in the second quarter, up from the previous estimate of 2.4%, the spending data suggest the economy is on fairly solid footing, possibly putting a September rate hike back into play.

On the negative side of the ledger, however, core inflation weakened in July, with the Fed's preferred gauge rising by an annualized 1.2%, down from 1.3% in June—still well below the target 2%. And consumer sentiment slipped this month as Americans became more concerned about market volatility and slower growth overseas.

With economists meeting at Jackson Hole to discuss global monetary policies, several Fed members who are eager to raise rates acknowledged the turmoil in global markets may delay the first hike despite the relatively better U.S. economy. Responding to the soft inflation data, Minnestoa's Narayana Kocherlakota even called for additional monetary easing.

The other precious metals, too, were higher for the day and lower the week. Silver added 0.8% for a weekly loss of 5%. Platinum picked up 1.6% but lost still lost 0.5% on the week. Palladium jumped 3.7% today but fell 2.4% this week.

At the Comex close: December gold gained $11.40 to $1,134; September silver added 12 cents, to $14.54; October platinum picked up $15.70 to $1,021.70; and September palladium jumped $20.95, or 3.7%, to $589.55 an ounce to lose about 2.4% on the week.




August 27: Gold dips 0.2% on GDP revision

Source: Bill Musgrave, American Gold Exchange

Austin -- Gold dipped 0.2% to close under $1,123 as positive GDP data stoked U.S. equities and the dollar, dulling demand for safe-haven investments.

U.S. economic growth was revised to 3.7% in the second quarter, up from an earlier estimate of 2.3%, the Commerce Department said today. The stronger GDP was attributed in large measure to higher business investment and consumer spending. In addition, corporate profits rose 2.4% in Q2 after falling nearly 6% in Q1.

All three of the main U.S. indexes—Dow, S&P 500, Nasdaq—jumped more than 2%, as did the Global Dow. Treasury yields rose for a second day as investors steered back toward risk assets.

While the GDP revision suggests a stronger economy going forward, not all forecasts are so sanguine. The Atlanta Fed's GDPNow, widely seen as the most accurate indicator of real-time economic growth, sees the economy growing by just 1.7% in Q3, according to data released today.

Furthermore, the Commerce Department reported today that Gross National Income was just 2.1% in Q2, representing the largest gap with GNP in eight years. The measure of income generated by the production of all the goods and services in the economy, GNI is often considered a more accurate measure of economic activity.

The dollar received a boost from the upgraded GDP numbers, picking up 0.5% against a basket of rivals, as traders reassessed the timing of a rate increase. Yesterday, New York Fed President William Dudley damped expectations by saying the case for September is "less compelling" than it was a few weeks ago because of recent turmoil in global markets and the slowdown in China.

The other precious metals finished strongly higher, with silver gaining 2.7% while platinum and palladium rose 2.6% and 7.4%, respectively.

At the Comex close: December gold dipped $2 to $1,122.60; September silver gained 38 cents to $14.42; October platinum picked up $25.80 to $1,006; and September palladium jumped $38.96 to $568.60 an ounce.




August 26: Gold slides on returning risk appetite

Source: Bill Musgrave, American Gold Exchange

Austin -- Gold slid 1.2% to close under $1,125 after a new round of easing by China and dovish comments by a prominent Fed member spurred a rally in equities, reducing demand for safe haven assets.

The People's Bank of China announced yet another new stimulus measure to reignite growth in its slowing economy, injecting nearly $22 billion in the financial system through a short-term liquidity adjustment operation. The move follows a recent 3% devaluation of the yuan, and comes just one day after the central bank lowered reserve requirements and cut its benchmark interest rate.

New York Fed President William Dudley said today that the case for a rate hike in September is "less compelling" than it was a few weeks ago because of recent turmoil in global markets and the slowdown in China. A voting member of the FOMC, Dudley is seen as a close ally of Fed Chair Janet Yellen so his opinions carry added weight.

U.S. equities rallied behind Dudley's comments and the Chinese stimulus measures, pulling interest away from safety assets like gold and Treasury bonds. Shares were also buoyed by the Commerce Department's report that orders for durable goods rose 2% in July, more than expected. The Dow added rose more than 400 points, or 2.6%, while the Global Dow gained nearly 0.9%.

The other precious metals were mostly lower, with silver and palladium dropping 3.9% and 1.9%, respectively, while platinum rose 0.4%.

At the Comex close: December gold fell $13.70 to $1,124.60; September silver lost 57 cents to $14.04; October platinum added $3.50, to $980.20; and September palladium surrendered $10.45 to $529.65 an ounce.




August 25: Gold falls as China rate cut rallies stocks

Source: Bill Musgrave, American Gold Exchange

Austin -- Gold fell 1.3% to close above $1,138 after China cut interest rates to stabilize its plummeting markets, triggering a global rally in stocks and cutting demand for safe havens.

After its stock markets tumbled more than 20% in four days, China cut interest rates and bank-reserve requirements today, effectively flooding another $105 billion to its beleaguered economy. The surprise move was seen as an attempt to re-inflate asset prices and reassure world markets by kick-starting growth and liquidity in the world's second-largest economy.

Global stocks rebounded after the China cuts, with bargain-hunters swooping into most markets. Following its worst day in four years, Wall Street temporarily enjoyed its biggest rally of 2015, with the Dow surging nearly 500 points by mid-session before sliding back at the close to a 200-point loss. European stocks closed 4.2% higher, rebounding from their worst day since 2008.

The dollar recovered somewhat after Monday's 1.7% drubbing, picking up 1.1% against major rivals. The buck is still down nearly 1% this week. A stronger dollar pressures gold and other commodities by making them more expensive overseas.

The dollar's upside is capped by growing expectations that the Fed will have to postpone raising interest rates until late this year, or even next year, because of heightened market volatility and rising global deflationary pressure. The CME Fedwatch tool now shows the probability of a September hike falling to just 21%, down from 50% a few weeks ago, while January 2016 has risen to 54%.

Ray Dalio, founder of Bridgewater, the world's largest hedge fund, is predicting that the Fed will be forced to launch another round of quantitative easing before long. In a rearch note to clients, Dalio said falling commodity prices and massive new easing efforts by China, including today's rate cuts and the recent devaluation of the yuan, put the risk of global deflation squarely on the table. Tantamount to printing money, QE is intended to forestall deflation by stimulating inflation. Gold rose over $1,900 in 2011 during earlier rounds of QE.

The other precious metals also finished lower. Silver dropped 0.8% while platinum and palladium lost 1.3% and 6.3%, respectively.

At the Comex close: December gold fell $15.30 to $1,138.30; September silver dropped 12 cents to $14.65; October platinum slid $13.40 to $978.10; and October palladium dumped $35.50 to $539.55 an ounce.




August 24: Gold slips 0.5% in global stock route

Source: Bill Musgrave, American Gold Exchange

Austin -- Gold slipped 0.5% to close under $1,154, caught in the downdraft of near-panicked selling in global equity and commodity markets. The metal was also pressured by profit-taking following last week's 4.2% rally, which pushed it to a new six-week high.

The Dow plunged an astonishing 1,000 points in a matter of minutes this morning, triggered by an 8.5% rout in China's stock market, which has now surrendered all of its gains for 2015. With bargain hunters stepping in, the Dow retraced half of those losses by mid-session but still fell more than 3%. The S&P 500 lost 4% and Global Dow 3.7%.

The dollar fell 1.3% as currency traders scrambled into the perceived safety of the yen, which gained nearly 2%. The buck was also pressured by speculation that the Fed is less likely to raise interest rates next month. Barclay's pushed its forecast for the first rate hike out to March 2016 in the wake of market volatility and weakness in the Chinese economy. U.S. Treasury bonds rallied again, with 10-year yields falling below 2% for the first time in four months.

Virtually every market was caught in the plunge. Oil fell more than 5% and the Bloomberg Commodities Index fell 2.3%. The other precious metals were hit especially hard, with silver and platinum losing 3.5% while palladium tumbled 4.9%.

At the Comex close: December gold slipped $6 to $1,153.60; September silver dropped 54 cents to $14.76; October platinum fell $35.60 to $991.50; and September palladium tumbled $29.40 to $575.05 an ounce.




August 21: Gold rallies to 4.2% weekly gain

Source: Bill Musgrave, American Gold Exchange

Austin -- Gold extended its rally by 0.6% to close at a new six-week high near $1,160 as more bad economic data from China and the U.S caused stocks to plummet, fueling demand for safe havens. The metal finished 4.2% higher for the week, its biggest weekly rise since January.

China's factory sector retreated by the most in more than six years in August, according to the preliminary Caixin/Markit China PMI, further damaging the global economic outlook. Growth in the world's second-largest economy has fallen to the slowest pace in more than two decades, causing the PBOC to devalue its currency by last week in hope of reinvigorating exports.

Growth in U.S. manufacturing also slowed last month, with the Markit flash PMI dipping to the lowest level in nearly two years. Companies say the strong dollar is hurting exports and undermining demand for factory goods, conditions that are likely to be exacerbated by China's devaluation of the yuan and a hike in interest rates by the Fed.

Global stocks sold off again on fears of slowing global growth, with the Dow plunging another 1.6% and the Global Dow 1.8%. Treasury bonds rallied again alongside gold on safe-haven inflows, pushing 10-year yields to four-month lows.

The dollar fell sharply against major rivals as the odds recede for a rate hike in September. Traders now view the probability of a September hike at just 28%, according to the CME Fedwatch tool, versus 60% for December.

The other precious metals were mixed, with silver and platinum sliding 1.4% and 0.9%, respectively, while palladium added 0.5%.

At the Comex close: December gold gained $6.40 to $1,159.60; September silver fell 23 cents to $15.29; October platinum lost $9.60 to $1,025; and October palladium picked up $3 to $600 an ounce.




August 20: Gold surges 2.2% to reclaim $1,150

Source: Bill Musgrave, American Gold Exchange

Austin -- Gold surged another 2.2% to close at a five-week high above $1,153 as mixed U.S. data and worries about global growth drove a sell-off in stocks, boosting demand for safe havens. On pace for its second straight weekly rise, the metal has rebounded more than 6% since late July, when it hit a five-year low near $1,077.

Equity indexes fell in a broad-based rout as skittish investors, fretting about slower growth in China and rising global deflation, shifted away from risk assets. The Dow plunged 358 points, more than 2%, while the NASDAQ lost 2.8% and the Global Dow 1.75%. U.S. Treasurys rallied on safe-haven inflows, pushing yields to the lowest levels in more than five months.

Another round of mixed U.S. data help to fuel the risk aversion. Jobless claims rose for the fourth straight week. The Conference Board's Leading Economic Index dropped in July after rising for four months, signaling a downshift in momentum for business cycles. And just a few days after the New York Fed region reported falling to recession-levels for factory output, the Philadelphia Fed region reported a slight uptick in business conditions last month, although new orders fell.

On the unequivocally positive side, U.S. home sales rose to a new post-recession high in July.

Gold's rally was also fueled by yesterday's dovish minutes from the last Fed meeting, in which many members viewed inflation as being too low to warrant a rate hike. This view was coincidentally reinforced by the release of CPI data showing that the pace of consumer inflation slowed in July. China's slowing economy was also cited as a risk to U.S. growth.

The dollar retreated again as traders speculate that a September rate hike is increasingly unlikely. A falling dollar supports gold and other commodities by making them less expensive overseas.

The other precious metals were mixed for the day and week. Silver slid 1.4% today but gained 0.6% this week. Platinum slid 0.8% but notched a 3.3% weekly gain. Palladium fell 3% today and 2.1% this week.

At the Comex close: December gold gained $6.40 to $1,159.60; September silver fell 22 cents to $15.30; October platinum lost $7.80 to $1,027.10; and September palladium dropped $18.80 to $604.50 an ounce.




August 19: Gold jumps 1% on CPI, Fed minutes

Source: Bill Musgrave, American Gold Exchange

Austin -- Gold jumped 1% to settle just under $1,128 after a soft CPI report weakened the dollar and boosted demand for alternative stores of value. The metal then extended those gains in electronic trade, rising as high as $1,135, after minutes from the July Fed meeting showed the central bankers no closer to raising interest rates.

Consumer inflation rose at a slower pace in July, the BLS reported today, inching up 0.1% after rising 0.3% in June and 0.4% in May. Following last week's PPI release showing wholesale inflation slowing at a similar rate, the data was viewed as offering no new impetus to the Fed for a September rate hike. Policy makers have repeatedly said they must feel "reasonably confident" that annual inflation will hit their 2% target before raising rates for the first time since 2006.

The minutes from the July FOMC meeting, released midday, reinforced this view by highlighting low inflation. Although economic conditions are getting closer to desired levels, the statement said, most members "need to see more evidence that…inflation would return to the committee's longer-run objective" before tightening monetary policy.

The statement also voiced concern China's economic slowdown "could pose risks to the U.S. economic outlook." This worry existed before last week's unprecedented devaluation of the yuan, which has set the stage for possible currency wars and falling global prices in addition to making it harder for U.S. companies to earn profits overseas because of the strength of the dollar.

The buck slid on the soft CPI report and then fell further after the Fed minutes, erasing all gains from the previous three sessions. A weaker dollar boosts gold and other commodities denominated in it for international trade by making them less expensive to users of other currencies.

U.S. treasury prices rose alongside gold on safe-haven inflows after the CPI and Fed minutes. The other precious metals also gained, with silver surging 2.6% while platinum and palladium rose 1.9% and 2.1%, respectively.

At the Comex close: December gold gained $11 to $1,127.90; September silver surged 39 cents, $15.18; October platinum picked up $19 to $1,013.10; and September palladium added $12.75, to $609.75 an ounce.




August 18: Gold inches lower on housing starts

Source: Bill Musgrave, American Gold Exchange

Austin -- Gold inched down 0.1% to finish just under $1,117 after positive housing data boosted the dollar, diminishing demand for alternative stores of value. The metal was supported, however, by safe-haven inflows after China's stock market plunged 6%.

Construction starts for new single-family homes jumped to the highest level since 2007, the Commerce Department reported today. Although building permits fell 16%, the data nonetheless signaled ongoing health in the housing sector.

The dollar edged higher against major rivals on the upbeat data, which follows recent rebounds in retail sales and consumer sentiment to strengthen the case for an increase in interest rates from the Fed sometime this year, perhaps as early as next month. A rising dollar typically weighs on gold and other commodities denominated in it for international trade by making them more expensive to users of other currencies.

Forex traders remain cautious, however, ahead of tomorrow's Consumer Price Index release, which could reinforce the Fed's reticence to tighten monetary policy if it comes in low. Wholesale inflation moderated in July, according to government data released on Friday. And last week's surprising devaluation of the yuan is expected to add to global deflationary pressure, something that concerns Fed and central bankers everywhere.

China's main stock indexes both tumbled more than 6% over worries that the devaluation signals deeper weakness to come in China's economy. U.S. and European were also pulled lower.

The other precious metals fell harder than gold. Silver led the way, dropping 3.3%, while platinum and palladium surrendered 0.7% and 2.7%, respectively.

At the Comex close: December gold dipped $1.50 to $1,116.90; September silver plunged 51 cents to $14.79; October platinum slid $6.60 to $994.10; and September palladium surrendered $16.80 to $597 an ounce.




August 17: Gold gains 0.5% after mixed data

Source: Bill Musgrave, American Gold Exchange

Austin -- Building on last week's 1.7% rise, gold gained another 0.5% in choppy trade to close above $1,118 after mixed U.S. data clouded the outlook for higher interest rates, stimulating demand for alternative assets.

Factory activity tumbled in the New York Fed region, falling to its lowest level in six years in August because of steep declines in new orders and shipments. The surprisingly weak data pushed the dollar lower against major rivals and caused gold to spike as high as $1,122 as traders speculated that the Fed would be less inclined to raise interest rates in September. A falling dollar supports gold and other commodities denominated in it for international trade by making them less expensive to foreign buyers.

Later in the session, the dollar rallied and gold surrendered some of its gains on reports that U.S. homebuilder sentiment rose in August to its highest level in 10 years, suggesting ongoing strength in the crucial housing sector.

Gold sentiment continues to be buoyed by last week's unexpected devaluation of the yuan, which closed the week 3% lower against the dollar as China seeks new ways to stimulate growth in its stagnating economy. Worries are growing that a currency war may follow, as other nations feel pressure to devalue their currencies in order to make their exports more competitive.

The other precious metals were mostly higher. Silver added 0.5% and platinum rose 0.7%, reclaiming $1,000 for the first time since mid-July, while palladium fell 0.6%.

At the Comex close: December gold gained $5.70 to $1,118.40; September silver picked up more than 8 cents to $15.30; October platinum rose $6.70 to $1,000.70; and September palladium slide $3.70 to $613.80 an ounce.




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