AGE Daily Gold Update

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

10/21/2024: Gold rallies despite yields, dollar

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold gained 0.3% to close above $2,723 despite higher Treasury yields and a stronger dollar as investors sought refuge from geopolitical turmoil in the Middle East and uncertainty about the upcoming US elections. Bullion hit an intraday record near $2,741 before slipping back. Silver jumped 2.5% to finish at $33.87 an ounce.

Solid data has recently underscored the resilience of the US economy, fueling confidence the Fed can take its time in cutting interest rates. Retail sales rose more than expected last week and five of the 10 metrics in today's release of the Conference Board's Leading Economic Indicators were positive. The Atlanta Fed has raised its Q3 estimate for GDP growth to 3.4%.

Fed fund futures traders now see an 87% likelihood that the Fed will cut interest rates by a quarter-point in November, down from nearly 91% on Friday and 100% a month ago. Dallas Fed President Lorie Logan said today that the "strong and stable" economy will allow for slow, deliberate monetary easing

Benchmark 10-year Treasury yields climbed above 4.1% to the highest level since July on the shifting rate view, capping gold's rise by increasing the opportunity cost for holding it instead of bonds as a safe haven.

Tracking higher with yields, the dollar added 0.3% against major rivals, extending its three-week run of gains. A rising buck weighs on gold and other commodities by making them pricier overseas.

Despite these headwinds, gold still extended its remarkable rally as investors seek portfolio diversification in the face of high equity prices, rising geopolitical uncertainty, and an exploding US public debt.

The US presidential race is balanced on a knife edge, the tensions between Israel and both Hamas and Hezbollah continue to escalate, and the US budget deficit for fiscal 2024 ballooned to the third-highest level ever.

Gold has gained 31% so far this year while achieving a succession of new all-time highs.

Platinum and palladium slid 0.7% and 2.7%, respectively.

At the New York spot close; gold gained $9.40 to close at $2,723.10; silver surged 84 cents to $33.87; platinum slipped $7.50 to $1,007.60; and palladium shed $29.30 to $1,055.60 an ounce.

10/18/2024: Gold moves solidly over $2700

Source: Matt Warden, American Gold Exchange

Austin — Gold continued its extraordinary 2024 rally today, with December futures prices climbing to $2,734.80 per ounce, adding another 1% today and a remarkable 32.6% since the beginning of the year, underscoring gold's enduring appeal as a safe-haven asset during times of economic and geopolitical uncertainty.

Friday was light on market moving U.S. economic data. Durable goods orders dipped modestly by 1%. And a final reading of Oct consumer sentiment was also released, basically unchanged. Gold’s surge well over $2700 on relatively little news underscores the steady demand for tangible assets without counterparty risk in an environment with growing geopolitical tensions, falling global interest rates, weak incoming economic data, and strong investor sentiment surrounding precious metals.

The other metals were even hotter today: silver rocketed higher by 6.4%, platinum added 2% and palladium increased 3.7% on the day.

At the New York spot close: December gold added $27.30 to $2,734.80; December silver launched $2.04 higher to $33.81; January platinum increased $19.90 to $1,025.70; and December palladium jumped $40.10 to $1085.50.

10/17/2024: Gold hits record high for 33rd time this year

Source: Matt Warden, American Gold Exchange

Austin — Gold has been on an extraordinary rally in 2024, with December futures prices reaching an intraday high of $2,712.70 per ounce, marking the 33rd record this year. Key factors driving this surge include strong foreign demand, particularly from BRICS nations, and concerns over the U.S. dollar's stability due to rising federal spending and persistent inflation.

Global monetary policies have also played a significant role in supporting gold prices. Central banks, including the European Central Bank, the Bank of England, the Bank of Canada, Swedens Riksbank, the Reserve Bank of New Zealand, the Swiss National Bank, and the US Federal Reserve, have entered an easing phase, with the ECB cutting its main interest rate to 3.25% today – its third quarter-percentage-point reduction of the year. These rate cuts across major economies have contributed to a favorable environment for gold, which shines in periods of low interest rates.

Thursday’s U.S. economic data was mixed, with strong retail sales and the Philly Fed’s factory index offset by weaker industrial production. Gold briefly dipped after a 0.4% rise in retail sales for September but quickly rebounded after a 0.3% decline in industrial output. The stronger retail sales increased the likelihood of the Federal Reserve opting for a 25-basis-point rate cut, instead of 50. However, it also underscores continued inflationary pressures, driven by robust consumer demand, which is supporting gold prices.

The other metals were mixed today: silver edged lower by 0.5%, while platinum gained 0.2% and palladium increased 1.7% on the day.

At the New York spot close: December gold climbed $16.30 to $2,707.60; December silver slipped $0.17 to $31.80; January platinum increased $2.10 to $1,004.70; and December palladium jumped $17.50 to $1043.50.

10/16/2024: Gold approaching record highs

Source: Matt Warden, American Gold Exchange

Austin — Gold moved closer to record highs on Wednesday, supported by a drop in U.S. bond yields and anticipated interest rate cuts from major central banks. Ongoing geopolitical tensions also provided additional safe-haven appeal for the precious metal. Spot gold increased by 0.4%, reaching $2,678.50 per ounce, approaching its previous record of $2,685.40 set last month.

The U.S. Federal Reserve is expected to cut interest rates 25 basis points in November, while weaker inflation data from Europe and the UK have increased the likelihood of monetary easing by the ECB and BoE. This has pushed down yields and provided a boost to gold prices.

U.S. Treasury yields dropped to their lowest levels in over a week, improving gold's appeal as the non-yielding metal typically shines in a low interest rate environment. According to the CME FedWatch tool, there is now a 96% likelihood of a 25-basis-point rate cut announcement by the U.S. Federal Reserve at the conclusion of their November 6-7 FOMC meeting.

The European Central Bank is expected to announce another rate cut this coming Thursday, and a decline in British inflation has increased the chances the Bank of England will cut rates a next month’s meeting.

In addition to anticipated rate cuts by central banks, gold demand is well-supported by loose fiscal policy, growing Middle East geopolitical tensions, accelerating de-dollarization, and uncertainties surrounding the upcoming U.S. Presidential elections.

Silver matched gold with a 0.4% increase, while platinum and palladium rose 1% and 1.6%, respectively, on the day.

At the New York spot close: December gold increased $10.90 to $2,689.80; December silver rose $0.13 to $31.89; January platinum rose $10.40 to $1,007.00; and December palladium moved $16.10 higher to $1028.00.

10/15/2024: Gold higher as Middle East tension simmers

Source: Dana Samuelson, American Gold Exchange

Austin — Gold and silver continue to bounce within recent trading ranges of $2,600 to $2,700 for gold and $30.50 and $32.50 for silver. Today both metals caught a modest bid as tension in the Middle East edged higher.

The Washington Post reported yesterday that the Israeli government told the US they would not target Iranian nuclear or oil production sites in any potential retaliatory strike they make against Iran. Today, however, Israeli Prime Minister Benjamin Netanyahu said while Israel would take US concerns into consideration, Israel would do whatever was in its own best interests. Meanwhile fighting on the Lebanese border between Israel and Hezbollah continued to percolate.

Both the US dollar and the US 10-year T-bill Yield were slightly lower from yesterday. The dollar was down 0.04% on the US dollar index to 103.25 while the yield on the 10-year T-bill edged lower from 4.10% yesterday to 4.037%.

At the New York spot close: gold gained $17.24 to $2,665.04; silver rose 35 cents to $31.59; platinum fell $7.20 to $987.70; and palladium fell $20.00 to $1011.90 an ounce.

10/14/2024: Gold and silver ease, remain rangebound

Source: Dana Samuelson, American Gold Exchange

Austin — Gold and silver gave up a bit of Friday’s gains but remained range-bound in modest New York trading today. Both metals traded in narrow ranges, in calm trading with little new economic or geopolitical news to move them higher or lower.

The US dollar continued its modes uptrend today with the dollar gaining another 37 basis points or .0.36% to 103.26 on the US dollar index, to its highest level since early August. Yields in the US 10-year T-bill were flat on the day. Gold is inversely correlated to the dollar. When the dollar gains value against other major currencies it makes gold more expensive in those currencies, dampening demand outside of the US where gold demand is substantially higher than in the US.

On Saturday, Chinese Finance Minister Lan Foan again underwhelmed both Chinese and global markets eager to learn just how far China would go to stimulate its depressed economy. While long on intent to stimulate, Foan was again short on details regarding just how much stimulus China might deploy to boost its ailing property markets, a primary source of wealth for Chinese citizens and investors.

Chinese stocks, which have surged sharply following the news a month ago of new Chinese stimulus programs, have been losing upside momentum in recent trading over the lack of new stimulus details. Saturday’s announcement did little to change that stalling momentum.

The US announced it would be sending a new missile defense system to Israel and 100 US troops to help manage it. The deployment of the Terminal High Altitude Area Defense missile system, or THAAD, is an indication of how sharp the Israeli response to Iran’s ICBM attack of two weeks ago may be. Israel and the US seem be anticipating that Iran will have no choice but to respond in kind to any retaliation salvo Israel fires at Iran.

At the New York spot close: gold eased down $9.80 to $2,647.80; silver shed 28 cents to $31.24; platinum gained $9.80 to $994.80; and palladium fell $37.90 to $1031.90 an ounce.

10/11/2024: Gold and silver punch higher on tame PPI

Source: Dana Samuelson, American Gold Exchange

Austin — Gold and silver punched higher after the US reported the Producer Price Index on an annual basis fell 0.1%, from 1.9% in August to 1.8% in September. Core demand, which excludes food and energy, rose 0.2% on an annual basis from 2.6% in August to 2.8% in September. Month on Month final demand for services increased 0.2% while final demand for goods fell 0.2% MoM, netting out for a 0% change MoM. This reinforces the argument that inflation, while sticky now, will continue its modest downward trajectory, allowing the Fed room for future rate cuts.

Gold and silver reacted positively to the news in New York trading today with gold gaining 1.4% or $37 and silver gaining 1.6% or 51 cents at the close of the New York session. This puts gold and silver back into the center of the recent trading ranges they have established.

In late September gold peaked in the December futures contract at $2,708 and it bottomed this week at $2,618, before firming back up to $2,670 today. Silver peaked in early Oct. at $33.23 in the futures market, it bottomed out at $30.34 and ended the day back up to $31.57 in the futures market.

Metals were also boosted by comments made by Federal Reserve Bank of Chicago President Austan Goolsbee regarding future Fed rate cuts. Goolsbee indicated that the US economy had finally entered a period of normalcy following the volatility of the pandemic, and the post pandemic recovery period. With unemployment relatively low at around 4%, and inflation continuing to cool towards the Fed’s 2% target, Goolsbee said it was time to get the Federal Funds rate down from what he considers above normal.

“Taking the long view, inflation is way down,” he said. “While on the job-market side, it’s cooled from overly heated to something like steady state full employment…That would be a lovely picture that you would frame and put on the wall if you could freeze it, for dual mandate purposes. So, if that’s normal, the interest rate, in my view, is still well above where the steady state is.”

Meanwhile the world continues to wait for Israel’s response to Iran following what has been a relatively quiet week in Middle East turmoil. Israel’s response could come at any time.

At the New York spot close: gold gained $37.00 to $2,657.60; silver gained 51 cents to $31.52; platinum rose $17.45 to $985.15; and palladium eased $2.40 to $1069.80 an ounce.

10/10/2024: Precious metals rebound on surging unemployment

Source: Dana Samuelson, American Gold Exchange

Austin — Gold and silver rebounded from short-term lows as jobless claims surged to their highest level in over a year. Higher claims boost the prospects of dovish Fed rate cuts in the future. Conversely, inflation for September was higher than anticipated, which could push the Fed towards a less dovish fed rate policy in the future. Following the Fed’s pivot from defending against inflation to enhancing labor market participation last month, precious metals markets discounted inflations bump higher today in favor of employment concerns.

Initial claims for US unemployment benefits surged to 33,000 to 258,000, which were far higher than analysts anticipated. The surge is attributed to the aftereffects of Hurricane Helene in North Carolina and Florida, automobile-related layoffs in Michigan, and strikes against Boeing in California and Ohio. Analysts are expecting ongoing jobless claims to be more volatile than has recently been the case due to the knock-on effects of Hurricane Helene and now Hurricane Milton, which ravaged Florida yesterday.

Inflation proved to be sticky with the release of the September CPI figures this morning. Headline CPI surged 0.3% month by month but fell on an annual basis from 2.5% to 2.4%. Pushing headline CPI higher were food at 0.4% and shelter at 0.2%, which combined equal 75% of the monthly all items increase. Core CPI, which excludes food and energy, increased 0.2% MoM in turn boosting core CPI on an annual basis from 3.2% in August to 3.3% in September.

The Fed prefers the Personal Consumption Expenditure metric over the CPI. The CPI measures the change in the out-of-pocket expenditures of all urban households while the PCE index measures the change in goods and services consumed by all households. The PCE tends to reveal changes in consumer spending habits quicker than the CPI does. New monthly PCE data will be released tomorrow.

Both the value of the US dollar on the US dollar index and the yield on the 10-year US treasury bill edged slightly higher. The dollar gained 0.08 or 0.07% to 103.01 on the index and the 10-year T-bill inched up another 0.031 to 4.101% in afternoon trading. Inversely correlated, a rising dollar and/or rising yields weigh on gold, which does not offer a yield.

At the New York spot close: gold gained $14.60 to $2,620.60; silver gained 65 cents to $31.08; platinum rose $20.30 to $969.00; and palladium surged $29.30 to $1072.20 an ounce.

10/9/2024: Gold correction continues but eases

Source: Dana Samuelson, American Gold Exchange

Austin — Gold continued to correct lower on profit taking, falling $9.00 to close the New York session at $2,606, just above the psychological support level of $2,600. Silver firmed up modestly, closing at $30.42, up 7 cents from yesterday.

The Fed released the minutes of their September meeting, after which the Fed issued a jumbo 50 basis point rate cut, their first rate cut since 2019. The minutes indicated that in addition to lone dissenter Governor Michelle Bowman, who favored a 25-point rate cut, several other board members also were in favor of a 25-point rate cut, but those members nonetheless voted for the 50-point cut. The minutes reiterated what Chair Powell said in his press conference following the jumbo rate cut, risks to inflation outlook have diminished while risks to the employment outlook have risen.

Both the value of US dollar on the US dollar index and the yield on the 10-year US treasury bill increased modestly following the release of the minutes. The dollar gained 0.35 or 0.34% to 102.89 on the index and the 10-year T-bill inched up 0.048 to 4.065% in afternoon trading. Inversely correlated, a rising dollar and/or rising yields weigh on gold, which does not offer a yield.

Equity markets in China, which whipsawed higher two weeks ago following the surprise bazooka stimulus announcement from the Chinese government, whipsawed lower today on a lack of follow thru by the Chinese government on specific new stimulus plans. China said it would hold a policy briefing on fiscal policy Saturday.

Retaliation by Israel against Iran gained momentum after Israeli Prime Minister Netanyahu spoke with US President Biden on the phone today for almost an hour, their first conversation since August. Israeli Defense Minister Yoav Gallant delivered a tough message to Iran in a speech to Israeli intelligence services today. Gallant said, “Our attack on Iran will be deadly, precise and above all surprising. They will not understand what happened and how it happened. They will see the results.”

At the New York spot close: gold fell $9.00 to $2,606.00; silver gained 7 cents to $30.42; platinum fell $3.00 to $948.70; and palladium gained $36.00 to $1042.90 an ounce.

10/8/2024: Metals tumble on Chinese stimulus disappointment

Source: Dana Samuelson, American Gold Exchange

Austin — Precious metals tumbled following the resumption of trading in China upon the conclusion of their annual golden week holiday. After the Chinese announcement of major economic stimulus two weeks ago, analysts were anticipating major, new stimulus announcements upwards of $2 to $3trillion yuan today upon markets reopening.

While officials in the Chinese National Development and Reform Committee reiterated that China would speed up spending, boost investment, and increase support for low-income groups, market participants were underwhelmed by their new $28 billion stimulus announcement.

Analysts suspect that without further new, major stimulus announcements, the Chinese economy will tread water close to their goal of 5% annual growth in 2024 and will not gain new economic momentum. If so, demand for commodities, including precious metals, in the world’s second largest economy will dampen and so will commodity prices. Precious metals tumbled today as a result.

The value of the dollar against a basket of international currencies, the US dollar index, and the yield on the US 10-year T-bill were unchanged from yesterday.

While Israel is still considering retaliatory responses to Iran’s ICBM attack, the Israeli cabinet still needs to approve of a proposed response. Israel’s speaker of the Knesset Amir Ohana said today, “discussions are still taking place at the highest level regarding the outline of the response, but it will be significant, and it will come.”

At the New York spot close: gold fell $29.80 to $2,615.00; silver tumbled $1.39 to $30.35; platinum fell $25.30 to $951.70; and palladium shed $19.40 to $1006.90 an ounce.