AGE Daily Gold Update

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

9/6/2019: Gold slides after Powell comments

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slid 0.7% to close under $1,515 after an optimistic outlook from Fed Chair Jerome Powell offset soft jobs data to dull demand for safe havens. The metal ended the week down 0.9%.

US nonfarm payrolls added just 130,000 jobs in August, the smallest gain in three months and well short of forecasts. While the unemployment rate remained at 3.7%, the labor market weakened amidst slowing global growth and the deepening trade conflict with China.

Payrolls have added an average of 158,000 jobs per month over the past six months, down from 223,000 monthly in 2018, with most of the slowing in manufacturing and resource extraction. Gains have come mainly in service-related industries like healthcare and finance, which are more insulated from global developments.

Gold initially rallied above $1,536 as traders speculated that the soft jobs data will induce the Fed to cut interest rates when it meets later this month. Lower rates pressure the dollar by making it less attractive to foreign exchange traders seeking higher yield, supporting gold and other commodities, in turn, by making them less costly in other currencies.

But the metal reversed itself late in the session after an upbeat outlook from Jerome Powell boosted risk appetite. Speaking in Zurich, the Fed Chair said the outlook for the US economy remains favorable and the central bank is "not forecasting or expecting a recession."

The other precious metals were lower for the day and mixed for the week. Silver dropped 3.7% for a weekly loss of 1.2%. Platinum slipped 0.5% but added 2.9% this week. Palladium fell 1.1% on the day but picked up 0.4% this week.

At the Comex close: December gold lost $10 to $1,515.50; December silver lost 69 cents to $18.12; October platinum slid $5.20 to $958.50; and December palladium dropped $16.40 to $1,544.70 an ounce.