AGE Daily Gold Update

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

8/8/2022: Gold rebounds back over $1,800

Source: Bill Musgrave, American Gold Exchange

Austin — Gold rebounded 0.8% to close above $1,805 as drops in bond yields and the dollar lifted alternative assets ahead of Wednesday’s CPI release.

While still scoring a weekly rise of 0.5%, gold slipped 0.9% on Friday after a robust nonfarm payrolls report lifted yields and the dollar by assuaging recession fears. Traders speculated that the strong labor market could embolden the Fed to raise interest rates by another 75 basis points in September in hopes of choking off the hottest inflation in four decades.

Today’s trading action reversed those movements, with gold recouping almost all of Friday’s slide while Benchmark 10-year Treasury yields fell back under 2.8% and the dollar declined 0.2% against major rivals.

Perhaps having jumped too far after the jobs data, traders retraced themselves in anticipation of a possible easing of consumer inflation when the CPI is released this week. Analysts polled by Reuters expect annual inflation to drop to 8.7% from 9.1%. In addition, a Fed survey released today showed inflation expectations among consumers across all time horizons fell sharply in July.

A lower CPI and falling expectations about inflation would reduce pressure on the central bank to enact another jumbo rate hike at its next meeting. A smaller increase would further pressure the dollar and yields while lifting gold.

Higher oil prices also fueled gold’s bounce. US benchmark WTI crude rose 2% off a six-month low to $90.76 after the strong US jobs report kindled hope for renewed demand. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were also higher, with silver rising 3.7% while platinum and palladium climbed 1.5% and 5%, respectively.

At the Comex close: December gold gained $14 to $1,805.20; September silver jumped 77 cents to $20.61; October platinum picked up $13.70 to $938.40; and September palladium surged $112.80 to $2,241.50 an ounce.