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


8/12/2020: Gold edges up on inflation, dollar

Source: Bill Musgrave, American Gold Exchange

Austin — Gold edged up 0.1% to close at $1,949 as a rising consumer inflation and a weaker dollar boosted demand for alternative stores of value.

The Consumer Price Index climbed 0.6% for the second straight month in July, beating forecasts, as the cost of a wide variety of goods and services rebounded further from pandemic lows. The core CPI, excluding volatile food and energy prices, also rose 0.6%. The data follow a similar rise in wholesale inflation for the month.

The dollar rolled back 0.2% against major rivals as negotiations in Congress for another coronavirus aid package went nowhere, leaving tens of millions of Americans without relief. A falling dollar supports gold and other commodities by making the me less expensive overseas.

Traders speculate that other major economies and currencies will bounce back more quickly than the US because of better containment of the virus and greater political unity in providing stimulus.

The other precious metals were lower, with silver sliding 0.3% while platinum and palladium dropped 1.3% and 0.3%, respectively.

At the Comex close: December gold gained $2.70 to $1,949; September silver slipped 7 cents to $25.98; October platinum fell $12.20 to $959.20; and September palladium dipped $6.80 to $2,168.20 an ounce.


8/11/2020: Gold tumbles on vaccine hope

Source: Bill Musgrave, American Gold Exchange

Austin — Gold tumbled 4.6% to close under $1,947 after Russia announced the development of a coronavirus vaccine, prompting a technical selloff as traders took profits from the metal's epic rise to new all-time highs.

Vladimir Putin said today that Russia has registered the first vaccine for treatment of COVID-19. Although the drug has yet to complete the necessary trials to ascertain its safety or genuine effectiveness, the announcement nonetheless spurred a spike in risk appetite among investors hungry for any news that the devasting pandemic may soon be contained.

An open letter to Russia's heath ministry from Russia's Association of Clinic Trials Organization, a nongovernmental agency, tried to delay the registration, warning that the drug has "not even completed testing on 100 people." The WHO said it has not received enough information for evaluation.

Wall Street initially rose following the news before sliding back into losses as skepticism mounted. Treasury prices fell and yields jumped on the shift away from safe havens.

Gold's relentless rise in recent weeks to a series of new all-time highs led many traders to anticipate a healthy correction before the next leg higher. The vaccine announcement occasioned this correction. Once the price began to fall it triggered stop-loss orders that quickly built upon themselves, propelling gold to its biggest one-day drop since 2013.

The other precious metals were also sharply lower, with silver plunging 11% while platinum and palladium lost 3.1% and 4.2%, respectively.

At the Comex close: December gold lost $93.40 to $1,946.30; September silver plunged $3.21 to $26.05; October platinum dropped $31.30 to $971.40 an ounce and September palladium shed $95.40 4 to $2,175 an ounce.


8/10/2020: Gold gains on COVID, China tensions

Source: Bill Musgrave, American Gold Exchange

Austin — Gold gained 0.6% to close near $2,040 despite a rise in equities and the dollar as pandemic worries and increasing tensions between the US and China reinforced demand for safe havens.

Beijing imposed new sanctions against 11 U.S officials, including Senators Ted Cruz and Marco Rubio, in retaliation for similar actions by Washington against Chinese officials in Hong Kong. The the escalation comes after mutual embassy closures and deepening accusations by the US over intellectual property piracy and mishandling of COVID-19.

The US realized a grim milestone of 5 million confirmed cases, one-quarter of the worldwide total, as uncertainty grows over the effects of reopening schools. Cases are trending higher in 11 states over the past week while 11 have been steady and 28 have reported declines.

With further pandemic relief stalled in Congress, the President signed executive orders to deliver some additional fiscal stimulus, including payroll tax deferrals and a new program for unemployment benefits. While the legality and efficacy of the orders have been widely questioned, Wall Street reacted positively, with the Dow adding 1.3%.

The dollar picked up 0.2% against major rivals, limiting gold's gains, as the executive orders lifted hopes for recovery. A rising dollar tends to pressure gold and other commodities priced in it for global trade by making them more expensive in other currencies.

The other precious metals were sharply higher, with silver jumping 6.3% while platinum and palladium climbed 3.3$% and 4.3%, respectively.

At the Comex close: December gold gained added $11.70 to $2,039.70; September silver surged $1.72 to $29.26; October platinum picked up $32.30 to $1,002.70; September palladium rose $93.80 to $2,270.40 an ounce.


8/7/2020: Gold eases into 2.2% weekly gain

Source: Bill Musgrave, American Gold Exchange

Austin — Gold eased 2% to finish at $2,028 as solid payrolls data lifted the dollar, reducing demand for alternative stores of value. The metal still ended the week 2.2% higher after notching five consecutive record-high closes.

US nonfarm payrolls added nearly 1.8 million jobs in July, drawing the unemployment rate down from 11.1% to 10.2%. The increase was slightly above most forecasts but merely one-third of the 4.8 million of the jobs restored in June, when the nation began to emerge in earnest from coronavirus lockdowns that laid off more than 22 million Americans.

The better-than-expected job growth took some pressure off Congress to ratify additional aid after weeks of contentious negotiations. Wall Street fell on the dimming prospect of immediate transfusions of new stimulus, which have helped to lift the devastated US economy while fueling massive rallies in the stock market. The Dow and S&P 500 slid by 0.4% and Nasdaq fell 1.4%.

The dollar rebounded sharply, rising 0.8% against major rivals on speculation that the upbeat data may reduce the amount of aid delivered by Congress. A rising dollar typically pressures gold and other commodities by making them more expensive in other currencies.

The combination of near-zero interest rates and unlimited quantitative easing from the Fed, along with more than $3 trillion in fiscal stimulus, has knocked the buck to two-year lows against major rivals like the euro and Swiss franc. At the same time, it has helped to lift gold to new record highs above $2,000 an ounce.

The other precious metals were lower for the day but higher for the week. Silver dropped 3% today but still rose 13.7% this week. Platinum fell 4.2% but gained 5.6% this week. Palladium slid 3.7% today but held a gain of 1.5% this week.

At the Comex close: December gold fell $41.40 to $2,028; September silver lost 86 cents to $27.54; October platinum dropped $43.50 to $970.40; and September palladium shed $82.80 to $2.176.60 an ounce.


8/6/2020: Gold streaks to 5th record high

Source: Bill Musgrave, American Gold Exchange

Austin — Extending its epic winning streak, gold rose 1% to close near $2,070, another record finish, as the US economy's dim outlook pressured the dollar and bond yields, lifting demand for alternative stores of value. The metal has set new record-high closes for five straight sessions.

Officials of the Federal Reserve are warning that the US job market is weakening once again as coronavirus ramps up in much of the country. Describing the US economic rebound has "much more muted" now than in July, Dallas Fed President Robert Kaplan said this week that unemployment is likely to range as high as 10% by year end, up from the 8% previously projected.

Separately, Cleveland Fed President Loretta Mester said the labor market is even weaker than the data make it appear, with business activity pulling back as employers cut compensation and reduce hours for workers who furloughed workers who have been recalled.

Job cuts by US-based employers jumped 54% in July to the third-highest monthly total ever, according to a report from global outplacement firm Challenger, Gray & Christmas. The government's nonfarm payrolls report, due out tomorrow, will give bring the labor market into sharper focus.

The dollar weakened further, dropping around 0.1% against major rivals, as traders speculated that the US is likely to lag other major economies in rebounding from COVID-19 because of inadequate testing. A falling dollar supports gold and other commodities by making them cheaper overseas.

Yields on 10-year Treasury note also fell, pushing real yields (adjusted for inflation) further in the negative. Negative real yields are beneficial for gold because they eliminate the opportunity cost of holding the meal, which produces no yield itself.

The other precious metals also surged, with silver jumping another 5.6% while platinum and palladium rose 2.5% and 2%, respectively.

At the Comex close: December gold gained $20.10 to $2,069.40; September silver climbed $1.51 to $28.40; October platinum added $24.80, to $1,013.90; and September palladium rose $43.90 to $2,259.40 an ounce.


8/5/2020: Gold jumps to another record close

Source: Bill Musgrave, American Gold Exchange

Austin — Gold jumped 1.4% to close above $2,049 as disappointing payrolls data and rising stocks weakened the dollar, boosting demand for alternative store of value. It was the metal's seventh record finish in the past eight sessions.

Private payrolls added merely 167,000 jobs in July, far below June's 4.3 million, as the resurgent spread of COVID-19 caused new business closures in hard-hit states. The slowdown came mainly in the leisure and hospitality sectors as restaurants, bars, and hotels were forced to curtail reopening.

Other areas of the economy fared better in July. The services sector edged up to 58.1%, according to the ISM index, where anything over 50% signals expansion relative to the previous month. Activity remains far below pre-pandemic levels, however.

Wall Street rallied sharply on unexpectedly strong corporate earnings and expectations that governments will continue to pour unprecedented stimulus into the global economy. The Dow climbed 1.4%, led by an 8% surge in Disney, while the S&P 500 and Nasdaq rose 0.6% and 0.5%, respectively.

The dollar extended its recent slide, dropping another 0.5% on speculation that other major economies will rebound from the coronavirus more quickly that the US. A falling dollar supports gold and other commodities priced in it for global trade by making them less expensive in other currencies.

The other precious metals were also sharply higher, with silver rising another 3.3% while platinum and palladium added 3.5% and 2.1%, respectively.

At the Comex close: December gold gained $34.70 to $2,049.30; September silver climbed 86 cents to $26.89; October platinum rose $33.90 to $989.10; and September palladium picked up $44.90 to $2,215.50 an ounce.


8/4/2020: Gold blows by $2,000 an ounce

Source: Bill Musgrave, American Gold Exchange

Austin — Gold surged another 1.7% to close at 2,021, a new record high, as hopes for further fiscal stimulus and concerns about covid resurgence pressured bond yields, lifting demand for alternative stores of value. It was the first time in history the metal closed above $2,000 an ounce.

Congress appears to be making progress toward another major stimulus package after leaders from both parties said stalled talks have become "productive." House Democrats are pushing for a $3 trillion aid program while Senate Republicans are pitching a much smaller package of around $1 trillion.

The Treasury Department said yesterday that it expects to borrow another $2 trillion to finance the next aid package through Q3 and Q4 of this year. These figures, based on the $1 trillion Republican plan, are likely to rise with the cost of the final bill.

Gold has surged more than 30% this year as governments have flooded the global economy with cash though fiscal stimulus and monetary easing to combat covid-induced recessions. While necessary, these actions have increased the risk of currency debasement and long-term inflation, both of which are reasons why investors have historically turned to gold.

Additional stimulus and deeper deficit spending should support even higher gold prices in coming months. This week, Goldman Sachs raised its 12-month gold forecast to $2,300. Bank of America is projecting gold at $3,000 an ounce within 18 months.

Treasury yields fell again as investors worry that the US economic recovery will take longer than expected, pushing real yields—or yields adjusted for inflation—further into the negative. Because gold offers no yield of its own but tends to rise with inflation, negative real yields make it more attractive because they eliminate the opportunity cost for holding it instead of bonds.

The other precious metals also rose sharply, with silver jumping 6.6% while platinum and palladium added 2.6% and 1.5%, respectively.

At the Comex close: December gold surged $34.70 to $2,021; September silver jumped $1.61 to $26.03; October platinum picked up $24.10 to $955.20; and September palladium climbed $31.10 to $2,170.60 an ounce.


8/3/2020: Gold inches to new record high

Source: Bill Musgrave, American Gold Exchange

Austin — Gold inched up by less than 0.1% to close above $1,987, another record finish, despite rallies in the dollar and equities after upbeat manufacturing data boosted risk appetite. The metal also reached another intraday record near $2,010 before slipping back on profit-taking.

US manufacturing rose in July for the third straight month, with the ISM index registering 54.2%, where everything above 50% means expansion. While encouraging, the reading is somewhat misleading. The index measures the increase from the previous month, not the actual level of production, which remains well-below pre-pandemic levels.

China's manufacturing jumped to the highest level in nine years in July, according to the private Caixin China Index. It was the fifth straight month of expansion in production and overall new orders, although orders for export remained in contraction.

Wall Street rallied on hopes that manufacturing is leading the way toward a global recovery. The Dow jumped nearly 1% while the tech-heavy Nasdaq added 1.5%. An upsurge in major mergers also stoked risk appetite after Google acquired 7% of home security firm ADT and Microsoft moved to purchase Tik-Tok.

The dollar picked up 0.3%, rebounding slightly from its 4% plunge in July, its worst month in a decade. A rising dollar typically weighs on gold and other commodities prices in it for global trade by making them more expensive overseas.

The other precious metals were mostly higher, with silver and platinum rising 1% and 1.3%, respectively, while palladium slipped 0.3%.

At the Comex close: December gold added 40 cents, to $1,986.30; September silver rose 20 cents to $24.42; October platinum climbed $12.20 to $931.10; September palladium slid $5.80 to $2,139.50 an ounce.


7/31/2020: Gold surges to 10% monthly rise

Source: Bill Musgrave, American Gold Exchange

Austin — Gold gained 1% to close at $1,985.90, a new all-time high finish, as economic and political worries lifted safe-haven assets despite an uptick in the dollar and a solid rally in tech stocks. The metal rose 4.7% for the week and 10.3% in July for its best month in more than four years.

Consumer sentiment faltered in July after two months of improvement, with the University of Michigan index dropping below 73, nearly the lowest point since the pandemic began. Americans are growing increasingly doubtful the recession, which began officially in February, will end anytime soon as COVID-19 cases ramp up and more regions re-institute closures.

With consumer spending comprising around 70% of GDP, the depressed sentiment does not augur well for an economy that plummeted by 33% during the second quarter, he most since the Great Depression.

Worries about November also weighed on investors after President Trump tweeted yesterday that he might try to postpone elections. While he has no authority to do so, the mere suggestion adds another element of chaos into markets already reeling from uncertainty.

Benchmark 10-year Treasury notes rallied alongside gold on flights to safety, knocking overnight yields down to the lowest point since March 9, when financial markets panicked because of the emergent coronavirus.

Gold's tenth rise in the last 11 sessions came despite a a good day for tech stocks and the dollar. The tech-heavy Nasdaq index rose by 1.1% after strong performances by Apple, Facebook, and Amazon.

The dollar added 0.4% against major rivals but still lost around 4% for July, notching its worst month since September 2010. A weaker dollar supports gold and other commodities by making them less expensive in other currencies.

The other precious metals were mixed for the day but sharply higher for the month. Silver jumped 3.7%, today pushing its monthly gain to nearly 30%. Platinum added 0.7% for a monthly increase of 8%. Palladium edged down 0.5% but still rose 9.1% in July.

At the Comex close: December gold, the most-active contract, gained $19.10 to $1,985.90; September silver jumped 85 cents to $24.22; October platinum added $6.30, to $918.90; and September palladium dropped $10.40 to $2,145.30 an ounce.


7/30/2020: Gold slips on profit-taking

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slipped 0.6% to close above $1,942 as traders took profits from nine straight days of gains that have taken the metal to a sequence of new record highs. Grim coronavirus and GDP data led to selloffs across most financial markets, catching gold in the downdraft.

The Commerce Department reported GDP plunged an astounding 32.9% in the second quarter, the biggest contraction since the Great Depression, as COVID-19 forced closures of businesses across the nation.

Without the $3 trillion relief package passed in May, most economists agree, the decimation would have been far greater. A key component of that aid, the federal $600-per-week unemployment benefit, expires tomorrow. Congress has yet to agree to a new fiscal plan.

Most of the economic contraction occurred before the lifting of lockdowns in June. But the subsequent rebound has become increasing tenuous as infections skyrocketed in July. Although new cases appear to be plateauing, the daily death toll surged to 1,400 yesterday, the highest in two months.

And the resurgent pandemic is starting to harm the labor market. First-time claims for unemployment benefits rose for the second week, with more than 1.4 million workers newly laid off.

Adding to the uncertainty, President Trump tweeted today that the presidential election might have to be delayed because of what he sees as possible voter fraud.

The Dow fell 0.9% and the dollar dropped 0.5% as pandemic and political anxiety gripped the markets.

The other precious metals fell much harder than gold, with silver losing 3.9% while platinum dropped 4.8% and palladium surrendered 5.6%.

At the Comex close: August gold slid $11.10 to $1,942.30; September silver dropped 96 cents to $23.36; October platinum lost $45.90 to $912.60; September palladium dumped $126.30 down to $2,134.90 an ounce.

  

Metal Ask      Change
Gold $1,938.46           $15.94
Silver $26.72           $1.11
Platinum $987.50           $39.65
Palladium $2,237.77           $34.39
In US Dollars