AGE Daily Gold Update

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

9/10/2019: Gold slides under $1,500

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slid 0.8% to close just above $1,499 as the prospect of deeper global easing lifted bond yields and the dollar, undercutting the attraction of safe-haven assets. It was the metal's first finish under $1,500 in more than a month.

The European Central Bank is widely expected to expand monetary stimulus when it meets later this week, sending interest rates deeper in negative territory and perhaps reinstating the bond-buying program known as quantitative easing.

Separately, Germany has signaled that it may issue debt to pay for spending projects designed to boost its flagging economy, the biggest in the Eurozone. According to the German finance minister, Olaf Sholz, the nation is looking at the creation of a "shadow budget" that will enable it to inject "many, many billion of euros" into the economy without running afoul of constitutional restrictions.

And the Bank of Japan is reportedly discussing the possibility of new stimulus measures when it meets in mid-September, hoping to offset fallout from the US-China trade war.

The promise of renewed global easing is causing traders to liquidate safe-haven investments, driving global bonds lower along with gold. US Treasury and German bund yields climbed to multi-week highs.

The dollar edged higher against a basket of rivals as the euro and yen slid on easing expectations. A stronger dollar pressures gold and other commodities by making them more expensive overseas.

Despite gold's recent consolidation after rallying to new six-year highs, analysts remain bullish on the metal because of currency devaluation, slowing growth, and pervasive uncertainty about trade. In a published research note, analysts at Citi expect gold will "trade longer and stronger," with prices possibly exceeding $2,000 with a year or two.

The other precious metals were mixed, with silver and palladium rising 0.1% and 1.2%, respectively, while platinum fell 1.7%.

At the Comex close: December gold dropped $11.90 to $1,499.20; December silver added 2 cents, to $18.19; October platinum fell $16.10 to $936.60; and December palladium climbed $17.30 to $1,554.10 an ounce.