AGE Daily Gold Update

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

8/6/2020: Gold streaks to 5th record high

Source: Bill Musgrave, American Gold Exchange

Austin — Extending its epic winning streak, gold rose 1% to close near $2,070, another record finish, as the US economy's dim outlook pressured the dollar and bond yields, lifting demand for alternative stores of value. The metal has set new record-high closes for five straight sessions.

Officials of the Federal Reserve are warning that the US job market is weakening once again as coronavirus ramps up in much of the country. Describing the US economic rebound has "much more muted" now than in July, Dallas Fed President Robert Kaplan said this week that unemployment is likely to range as high as 10% by year end, up from the 8% previously projected.

Separately, Cleveland Fed President Loretta Mester said the labor market is even weaker than the data make it appear, with business activity pulling back as employers cut compensation and reduce hours for workers who furloughed workers who have been recalled.

Job cuts by US-based employers jumped 54% in July to the third-highest monthly total ever, according to a report from global outplacement firm Challenger, Gray & Christmas. The government's nonfarm payrolls report, due out tomorrow, will give bring the labor market into sharper focus.

The dollar weakened further, dropping around 0.1% against major rivals, as traders speculated that the US is likely to lag other major economies in rebounding from COVID-19 because of inadequate testing. A falling dollar supports gold and other commodities by making them cheaper overseas.

Yields on 10-year Treasury note also fell, pushing real yields (adjusted for inflation) further in the negative. Negative real yields are beneficial for gold because they eliminate the opportunity cost of holding the meal, which produces no yield itself.

The other precious metals also surged, with silver jumping another 5.6% while platinum and palladium rose 2.5% and 2%, respectively.

At the Comex close: December gold gained $20.10 to $2,069.40; September silver climbed $1.51 to $28.40; October platinum added $24.80, to $1,013.90; and September palladium rose $43.90 to $2,259.40 an ounce.