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


8/17/2022: Gold trims losses after Fed

Source: Bill Musgrave, American Gold Exchange

Austin — Gold dropped 0.7% to close at a two-week low under $1,777 as yields and the dollar rose ahead of the release of the Fed's July minutes. The metal trimmed its losses in electronic trade and pushed as high as $1,784 after then Fed left the door open to smaller rate hike.

At the July meeting of the FOMC, Fed officials agreed on the need to raise interest rates high enough to slow the economy. While noting that the economy was "noticeably weaker" in July, and that unemployment is likely to rise this year, a regime of increasingly "restrictive" interest rates is still needed, the minutes said,

But the central bankers also signaled their openness to slowing the pace of rate hikes, acknowledging the risk of tightening monetary policy "by more than necessary" in the quest for price stability.

Fed funds futures traders heard this message as carrying slightly dovish undertones. The odds of a September rate hike of 50 basis points rose to 64% from 59%, according to CME FedWatch, while the odds 75 basis points fell from 41% to 36%.

Prior to the Fed minutes, the dollar rose 0.2% against major rivals on hawkish expectations, only to retrace half that gain on the dovish read.

Likewise, Benchmark 10-year Treasury yields rose before and backtracked after the minutes, helping gold to trim its losses by decreasing the opportunity cost for holding instead of bonds as a safe-haven asset.

The other precious metals were also lower, with silver sliding 0.7% while platinum lost 1,3% and palladium shed 0.6%.

At the Comex close: December gold dropped $13 to $1,776.70; September silver fell 35 cents to $19.73; October platinum slid $12 to $919.30; and September palladium lost 12.30 to $2,136.70 an ounce.


8/16/2022: Gold slips ahead of Fed minutes

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slipped 0.5% to close under $1,790 as bond yields and the dollar edged up on mixed US data ahead of tomorrow's release of the minutes from the Fed's July meeting.

Construction of new US homes fell nearly 10% in July, according to the Commerce Department, to the lowest level in more than 18 months. The dismal data comes one day after the National Association of Home Builders reported that its members see a "housing recession" coming as mortgage rates rise and demand cools.

In a more optimistic report, national industrial output rose 0.6% last month behind a sharp rebound in auto production. Whether it can be sustained is an open question after the Empire State index, considered a weathervane of US manufacturing, plummeted deeply into contraction in August.

The dollar edged up 0.1% to hold at a three-week high on expectations that the Fed will continue to raise interests more aggressively than its peers. China's recovery has all but stalled, prompting the PBOC to cut rates this week. Europe is reeling from slow growth and an energy crisis driven by Russia's retaliation for support of Ukraine.

While soft recent economic data and easing inflation have prompted speculation about a possibly smaller hike in September, the minutes from the last Fed meeting are expected to show the bankers unified in their resolve to fight inflation. Hawkish comments from Fed officials this week have reinforced this view.

Higher rates buoy 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.

Benchmark 10-year Treasury yields also edged higher on the hawkish rate view, pressuring gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Falling oil prices helped to curtail gold's recent rise. US benchmark WTI crude plunged 3.5% to the lowest level sine January on demand concerns because of slowing global growth, especially in China. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were also lower, with silver slipping 0.9% while platinum and palladium dropped 0.3% and 0.4%, respectively.

At the Comex close: December gold slid $8.40 to $1,789.70; September silver slipped 19 cents to $20.09; October platinum dipped $2.30 to $931.30; and September palladium prices dropped $9.30 to $2,149 an ounce.


8/15/2022: Gold falls on China rate cut

Source: Bill Musgrave, American Gold Exchange

Austin — Gold fell 1% to close under $1,799 after weak economic data spurred an unexpected rate cut in China, lifting the dollar and undercutting alternative stores of value. It was the meal's lowest finish in a week.

China's industrial output, retail sales, and fixed-asset investment all failed to meet analyst estimates, signaling renewed weakness in the world's second-largest economy. The People's Bank of China responded with a surprise interest rate increase to provide stimulus.

The dollar surged 0.8% as the yuan tumbled and pressured risk-related currencies like the Aussie dollar and New Zealand kiwi. A falling dollar weighs on gold by making it more expensive in other currencies, limiting demand overseas.

Gold's tumble came despite slightly lower Treasury yields. Investors shifted toward the safety of government bonds after New York's Empire State index plummeted in August deeply into contraction territory. This regional index is closely watched as a weather vane for national manufacturing.

The other precious metals were also lower, with silver dropping 2.1% while platinum and palladium shed 2.7% and 2.8%, respectively.

At the Comex close: December gold fell $17.40 to $1,798.10; September slid 43 cents to $20.27; October platinum lost $25.80 to $933.60; and September palladium dropped $61.10 to $2,158.30 an ounce.


8/12/2022: Gold rises for 4th straight week

Source: Bill Musgrave, American Gold Exchange

Austin — Gold gained 0.5% to close above $1,815 despite a stronger dollar and rising risk appetite as falling inflation buoyed speculation that the Fed may to scale back the size of future rates hikes. The metal finished the week 1.5% higher for its fourth straight weekly win, the longest streak since last December.

US import prices fell 1.4% in July on lower costs for fuel, industrial supplies, and food. It was the first decline since December and the biggest since April 2020, when most of the world went into Covid lockdown.

Following lower US consumer and wholesale prices in July, the lower import prices added to optimism that the peak inflation may have passed, stoking risk appetite and speculation that the Fed may gear back somewhat on rate hikes.

Fed fund futures traders now see a 58% probability that the Fed will raise rates by 50 basis point in September, up from 32% a week ago. The odds of a third straight hike of 75 basis points have fallen from 68% before the new inflation data to 42% today.

Smaller rate hikes support gold by keeping yields low, decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset. They also keep a lid on the dollar, which helps gold by making it cheaper in other currencies.

Consumer sentiment ticked up, according to the University of Michigan survey, as Americans began to moderate their inflation expectations. But overall sentiment remains mired near all-time lows, especially among lower- and middle-income Americans, for whom higher prices have a bigger impact.

Capping gold’s rise for the day and week, US equities jumped on the dual prospect of lower inflation and smaller rate hikes. The S&P 500 and Nasdaq climber 1.5% and 2%, respectively, to post their fourth straight weekly increase. The Dow added 1%.

The other precious metals were mixed for the day by higher for the week. Silver rose 1.7% for a weekly increase of 4.3%. Platinum was near-flat for the day and 2.8% higher for the week. Palladium fell 3% today but still gained 4.3% this week.

At the Comex close: December gold gained $8.30 to $1,815.50; September silver climbed 35 cents to $20.70; October platinum edged down 90 cents to $957.40; and September palladium dropped $69 to $2,219.40 per ounce.


8/11/2022: Gold dips on profit-taking

Source: Bill Musgrave, American Gold Exchange

Austin — Gold dipped 0.4% to close above $1,807 despite upbeat data on wholesale inflation as yields rebounded and traders took profits from the recent gold rally. The metal had risen 1.3% over the previous three sessions and 5% over the past two weeks, driven mainly by worries over slowing growth and geopolitical tensions.

The US producer price index fell 0.5% in July to post its first negative month since April 2020. The decrease was led by a 1.8% reduction in the cost of goods and a 9% tumble in energy costs. The core PPI, excluding food and energy, added 0.2%.

Coming one day after data showing softer consumer inflation, the lower print on wholesale inflation suggests further moderation in consumer prices in coming months as lower producer costs work their way through the supply chain.

Following the auspicious consumer inflation data yesterday, traders increased their bets that the Fed will throttle back its aggressive rake hike campaign. Fed fund futures dropped the odds of 75-basis-point increase in September from 70% to around 40%.

But a pair of regional Fed presidents have pushed back on the dovish narrative. Charles Evans of the Chicago Fed and Neel Kashkari of Minneapolis separately said the central bank will continue to drive rates higher until consumer inflation is on its way back down to 2%.

Benchmark 10-year Treasury yields bounced back up near 2.9%, weighing on gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset. The dollar was nearly flat.

The other precious metals were mixed, with silver dropping 1.8% while platinum and palladium rose 1.4% and 1.9%, respectively.

At the Comex close: December gold futures slipped $6.50 to $1,807.20; September silver dropped 38 cents to $20.35; October platinum picked up $13.30 to $959.40; and September palladium rose $42.50 to $2,288.40 an ounce.


8/10/2022: Gold climbs after cooler CPI

Source: Bill Musgrave, American Gold Exchange

Austin — Gold edged up 0.1% to close near $1,814 after cooler consumer inflation pressured yields and the dollar, lifting alternative assets. The metal reached an intraday high near $1,825 before receding on a sharp rise in risk appetite.

The Consumer Price Index was unchanged July, dropping the 12-month inflation rate to 8.5%, down from a 41-year high of 9.1% in June. Tumbling gasoline prices drove the decrease. The core CPI, excluding food and energy, rose 0.3%.

Wall Street hailed the surprising data as evidence that peak inflation may have passed. The Dow and S&P 500 jumped 1.6% and 2.1%, respectively. High-flying tech stocks, typically more vulnerable to high inflation and interest rates, reacted the strongest. The tech-heavy Nasdaq surged 2.9%.

The dollar plunged 1.1% against major rivals as traders speculated that tamer inflation may make the Fed less inclined to raise interest rates so aggressively in September.

The odds of a 75-basis-point hike at the next Fed meeting fell from 70% before the CPI release to 43% after, according to CME FedWatch, while the odds of a 50-point hike increased from 32% to 56%.

The prospect of a smaller rate hike weighed on the dollar by making it less attractive to Forex investors seeking higher yield. A weaker dollar, in turn, supports gold and other commodities by making them less expensive overseas.

Benchmark 10-year Treasury yields also pulled back on the dovish rate view, buoying gold by decreasing the opportunity cost for holding it instead on bonds as a safe haven.

The other precious metals were also higher. Silver jumped 1.3% while platinum rose 1.4% and palladium 1.2%.

At the Comex close: December gold futures added $1.40, to $1,813.70; September silver climbed 26 cents to $20.74; October platinum picked up $13 to $946.10; and September palladium futures rose $27.10 to $2,245.90 an ounce.


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.


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.


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.


8/4/2022: Gold surges on lower yields, dollar

Source: Bill Musgrave, American Gold Exchange

Austin — Gold surged 1.7% to close near $1,807 as a retreat in yields and the dollar lifted alternative assets while tensions with China undergirded safe-haven demand. It was the metal’s highest finish in a month.

Responding to House Speaker Nancy Pelosi’s visit to Taiwan, China fired several missiles near the self-ruled island during its biggest ever military drills in the Taiwan Strait. The blatant militarism heightened tensions and sparked concerns about further conflict.

Rising inflation and higher US interest rates are beginning to show in the labor market. First-time jobless claims rose to a nine-month high last week, responding to an uptick in layoffs within the tech sector. Technology companies are heavily impacted by rising rates because their valuations are based on future earnings, which are eroded by inflation and rising borrowing costs.

Tomorrow’s release of the government nonfarm payrolls report is forecast to be weaker, with around 260,000 jobs added in July, the fewest in 19 months.

Benchmark 10-year Treasury yields slid under 2.7% as investors sought safety on the increased US jobless and fears of an economic slowdown. Falling yield s support gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar fell 0.7% against major rivals, notably the UK pound, after Bank of England lifted interest rates by 50 basis points, the most since 1995. The central bank also warned that inflationary pressures are likely to result in a recession later this year. A weaker dollar lifts gold and other commodities by making them cheaper in other currencies.

The other precious metals were also higher. Silver rose 1.7%; platinum added 1.6%, and palladium picked up 3.9%.

At the Comex close: December gold surged $30.50 to $1,806.90; September silver jumped 32 cents to $20.12; October platinum rose $36.40 to $924.90; and September palladium climbed $69.60 to $2,077.50 per ounce.

  

Metal Ask      Change
Gold $1,765.55           Price Change Down Arrow $-0.33
Silver $19.75           Price Change Down Arrow $-0.17
Platinum $931.92           Price Change Down Arrow $-9.01
Palladium $2,182.70           Price Change Down Arrow $-6.56
In US Dollars