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


7/9/2019: Gold edges up with oil rally

Source: Bill Musgrave, American Gold Exchange

Austin — Gold inched 50 cents higher to close at $1,400.50 after an uptick in the dollar hampered interest in alternative stores of value despite a rally in oil prices.

With the markets largely treading water ahead of tomorrow's testimony on monetary policy before Congress by Jerome Powell, the dollar picked up 0.1% against major rivals to hit a 3-week high, boosted in part by bets that Fed Chair will be less dovish than previously expected. A rising dollar tends to pressure gold and other commodities priced in it for global trade by making them more expensive overseas.

For weeks, traders have been expecting the Fed to cut rates aggressively at the July meeting to offset slowing US and global growth. But Last Friday's stronger-than-forecast payrolls report, which showed 224,000 jobs added in June, changed the calculus on rates. While a quarter-point rate cut remains widely anticipated, the odds of a half-point reduction have fallen dramatically, according to Fed-fund futures trading.

Powell's testimony this week will be scoured for clues on how much, if at all, the Fed will reduce its benchmark lending rate. A bigger cut would pressure the dollar, boosting gold in turn.

Crude oil rose 1.3% as ongoing Middle East conflict and OPEC production cuts fueled concerns about global supplies. Saber-rattling between the US and Iran over uranium enrichment and tanker sabotage in the Gulf of Hormuz has kept tensions high for weeks in the volatile region. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The World Gold Council reported today that holdings in gold-back ETFs rose by 15% in June, the most in 7 years. Geopolitical uncertainty and increasingly dovish signals from global central banks have fueled the increase in gold investing as a safe-haven hedge.

The other precious metals were mixed, with silver rising 0.6% while platinum and palladium fell 0.7% and 1.2%, respectively.

At the Comex close August gold added 50 cents, to $1,400.50; September silver added a dime, to $15.15; October platinum slid $5.30 to $815.10; and September palladium dropped $18.30 to $1,539.90 an ounce.

  

Metal Ask      Change
Gold $2,235.81           Price Change Down Arrow $-2.68
Silver $25.08           Price Change Down Arrow $-0.06
Platinum $918.61           Price Change Down Arrow $-0.56
Palladium $1,051.50           Price Change Up Arrow $0.26
In US Dollars