AGE Daily Gold Update

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

8/3/2022: Gold slides on risk appetite

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slid 0.7% to close under $1,777 after upbeat US data stoked risk sentiment, lifting equities and undercutting safe-haven assets. It was the metal’s first down session in the past six.

The ISM reported that US service industries grew faster in July, with increases in orders, production and hiring. Importantly, supply and inflation pressures both abated. The services sector accounts for two-thirds of the US economy.

Wall Street jumped on the data, with the Dow and S&P 500 rising 1.3% and 1.6%, respectively, while the tech-heavy Nasdaq climbed 2.6%. Strong earnings from tech blue chips also fueled the rebound in risk appetite.

Benchmark 10-year Treasury yields climbed above 2.7% as investors rotated away from the perceived safety of government bonds. Higher yields weigh on gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Hawkish jawboning from several Fed officials also lifted yields. Speaking separately, regional Fed Presidents Mary Daley, Tom Barkin, and James Bullard all reaffirmed their commitment to higher rates and lower inflation.

The dollar edged up 0.1% against major rivals, pressuring gold and other commodities by making them pricier in other currencies, limiting overseas demand.

The other precious metals were also lower. Silver lost 1.2% while platinum fell 1.8% and palladium shed 3.9%.

At the Comex close: December gold fell $13.30 to $1,776.40; September silver dropped a quarter, to $19.89; October platinum lost $16.50 to $888.50; and September palladium shed $82.30 to $2,007.90 an ounce.