AGE Daily Gold Update

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

7/8/2019: Gold near-flat ahead of Powell

Source: Bill Musgrave, American Gold Exchange

Austin — Gold was nearly flat, dipping a dime to close at $1,400, as traders awaited this week's testimony before Congress by Jerome Powell, hoping for clues about the direction of interest rates.

Slowing growth, moribund inflation, and persistent trade tensions in recent months have led to the widespread expectation that the Federal Reserve will lower interest rates later this month, perhaps by a half-point.

Friday's robust payrolls report has complicated the outlook, however. US nonfarm payrolls added 224,000 new jobs in June, rebounding strongly from May's 72,000 and suggesting that the economy may be regaining its footing after a lull.

Suddenly, a deep rate cut no longer seems like a sure thing as the Fed Chair begins two days of briefing lawmakers on monetary policy on Wednesday. While trading in Fed-fund futures places the odds of a quarter-point reduction at 94%, the likelihood of half-point cut has dropped to 6% from 20% a week ago. A deeper cut would weaken the dollar by discouraging foreign exchange investors seeking higher yield, boosting gold and other commodities in tun by making them less expensive overseas.

The dollar edged slightly higher against major rivals, hovering around a three-week high on the shifting rate outlook.

Gold's slip was backstopped by safe-haven bids caused by falling US equities and rising Middle East tensions. The S&P 500 and Dow each fell 0.4% on the prospect of a smaller rate cut. Meanwhile, Iran threatened to accelerate the enrichment of uranium, a move that could court further confrontation with the US.

The other precious metals were mixed, with silver and platinum rising 0.3% and 1.1%, respectively, while palladium dropped 0.4%.

At the Comex close: August gold dipped 10 cents to $1,400; September silver added a nickel, $15.05; October platinum rose $9 to $820.40; and September palladium lost $6 to $1,558.20 an ounce.