AGE Daily Gold Update

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

8/9/2022: Gold rises to 6-week high

Source: Bill Musgrave, American Gold Exchange

Austin — Gold rose another 0.4% to close above $1,812 as bond yields and the dollar receded further ahead of tomorrow’s CPI release. It was the metal’s highest finish since late June.

Following last Friday’s US nonfarm payrolls report, which showed a whopping 528,000 new jobs added, consumer inflation data for July could go a long way to determining whether the Fed will enact another jumbo rate hike when it meets again in September.

Unemployment is now running at just 3.5%, the lowest since the late 1960s. But other measures of the economy have weakened notably this year, with GDP contracting in each of the first two quarters. The government reported today that productivity declined for the second straight quarter, typically leading to higher inflation, lower wages, and a slower economy.

Given these recessionary pressures, traders speculate that a cooler-than-expected CPI could result in a smaller rate hike while a hotter print could mean a bigger one. Higher rates are designed to lower inflation by cooling an economy that's overheating, not one that's already contracting.

Benchmark 10-year Treasury yields edged down again as investors sought shelter from rate uncertainty and economic precariousness in the perceived safety of government debt. Lower yields support gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar slipped 0.1% against major rivals, lifting gold and other commodities by making them less expensive in other currencies.

The other precious metals were lower, with silver and platinum each sliding 0.6% while palladium dropped 1%.

At the Comex close: December gold gained $7.10 to $1,812.30; September silver slid 13 cents to $20.48; October platinum dropped $5.40 to $933; and September palladium lost $22.70 to $2,218.80 an ounce.