AGE Daily Gold Update

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

8/5/2022: Gold slips on robust job report

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slipped 0.9% to close near $1,791 after an unexpectedly strong US jobs report lifted bond yields and the dollar, undercutting alternative store of value. The metal still finished 0.5% higher for the week.

The US economy added a stunning 528,000 new jobs in July, more than double most forecasts. The unemployment rate dropped to 3.5%, the lowest since the late 1960s, while average wages rose 0.5%.

After a spate of weak data in the past month, the blockbuster jobs report eased concerns about the economy’s health. It is also likely to embolden the Fed to continue pursuing an aggressive regimen on monetary tightening to contain the worst inflation in four decades.

Benchmark 10-year Treasury yields climbed to 2.85% on expectations of higher interest rates, pressuring gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar jumped 0.8% against major rivals on speculation that the Fed will lift interest rates by another 75 basis points in September. Fed funds futures traders are now pricing-in a 70% chance of a third straight jumbo hike, up from just 34% yesterday.

Higher rates lift the dollar by attracting Forex investment seeking higher yield. A stronger dollar weighs on gold and other commodities by making them pricier in other currencies, limiting overseas demand.

The other precious metals were mixed for the day and week. Silver fell 1.4% for a weekly loss of 1.8%, Platinum rose 0.2% today and 3.9% this week. Palladium added 2.5% and was virtually unchanged for the week.

At the Comex close: December gold fell $15.50 to $1,791.20; September silver dropped 28 cents to $19.84; October platinum added $1.50, to $924.70; and September palladium rose $51 to $2,128.50 an ounce.