AGE Daily Gold Update

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

9/3/2019: Gold jumps on data, tariffs, Brexit

Source: Bill Musgrave, American Gold Exchange

Austin — Gold jumped 1.7% to close near $1,556 as weak US factory data combined with Brexit turmoil and trade-war fears to stoke safe-haven demand. It was the metal's highest finish since April 2013. Silver surged nearly 5% to $19.24, a new three-year high.

The ISM reported US manufacturing fell into contraction in August, with the index falling under 50% for the first time since January 2016. New orders and production both weakened as tariffs weighed on exports and undermined business confidence. The index has dropped almost 10 points since the trade war began last summer.

Wall Street plunged after the ISM report, with the Dow and Nasdaq both falling 1.3%. Benchmark 10-year Treasurys rallied alongside gold and silver on flights to safety, driving yields to the lowest level in more than three years.

Also spurring risk-off sentiment, the US imposed new tariffs on Chinese goods over the weekend, adding to concerns about global growth. And Brexit turbulence increased as British PM Boris Johnson lost his majority in Parliament, undermining the stability of his government just weeks from the nation's deadline to leave the EU.

The dollar ended little changed as early-session gains on a tumbling British pound were offset by pressure from the contraction in US manufacturing, which raises the odds that the Fed will cut interest rates again this month.

Lower rates typically weaken a currency by making it less attractive to foreign exchange investors seeking higher yield. A weaker dollar, in turn, boosts gold and other commodities priced in it by making them less expensive overseas.

The other precious metals were mixed, with platinum rising 2.6% while palladium slid 0.3%.

At the Comex close: December gold jumped $26.50 to $1,555.90; December silver surged 90 cents to $19.24; October platinum gained $23.90 to $955.60; and December palladium lost $4 to $1,535.20 an ounce.