AGE Daily Gold Update

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

7/26/2024: Gold jumps 1.2% on soft PCE

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold rose 1.2% to close above $2,395 as another round of soft inflation data reinforced rate-cut expectations from the Fed, pressuring Treasury yields and boosting alternative stores of value. The metal still declined 0.6% for the week. Silver picked up 0.2% to finish at $27.86 for a weekly loss of 4.2%.

The personal consumption expenditures index inched up 0.1% in June, dropping the 12-month inflation rate to 2.5% from 2.6% in May. The cost of goods fell 0.2% while the cost of services rose 0.2%, the smallest increase in eight months. The so-called core PCE, excluding food and energy, rose 0.2% for the month, leaving the 12-month rate unchanged at 2.6%.

The modest PCE print brought relief to the markets, which were bracing for higher readings after yesterday's stronger-than-expected quarterly GDP report showed the PCE rising to 2.9% in Q2. The Dow jumped 1.5% while the S&P 500 added 1% and the Nasdaq 0.8%.

Fears about a potentially stronger June PCE reading was a significant driver of yesterday's proft-taking selloff across most assets, including gold.

Benchmark-10-year Treasury yields fell back to 4.2% as traders speculated the disinflationary trend will spur the Fed to cut rates in September. Falling yields support gold by decreasing the opportunity cost for holding it instead of bonds for safety.

Platinum edged down less than 0.1% today but suffered a 6% decline this week. Palladium dropped 1% for a 1.7% weekly loss.

At the New York spot close: gold gained $28.10 to $2,380; silver added a nickel, to $27.86; platinum dipped 80 cents to $936.30; and palladium shed $9.10 to $886.90 an ounce.

7/25/2024: Gold tumbles on profit-taking

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold tumbled 2.5% to close under $2,352 on profit-taking as traders shed almost every rallying investment in the wake of yesterday's major selloff on Wall Street. Silver plunged 4.1% to finish at $27.81 an ounce.

Weak tech earnings spurred a wipeout on Wall Street yesterday, driving the S&P 500 down by 2.3% for its worst day in a year. The tech-heavy Nasdaq fared even worse, plummeting 3.6% for its biggest daily drop in nearly two years.

Swept up in the selling convulsion, almost every rallying asset including mega-cap stocks, emerging markets, the dollar, crypto, and precious metals felt the panic today. And a tumultuous election cycle featuring an assassination attempt on Donald Trump and the decision by Joe Biden to leave the race, is fanning the flames of uncertainty.

Also weighing on gold, GDP for the second quarter came in stronger than expected at 2.8%, perhaps giving the Fed pause about reducing interest rates in September. But durable goods orders fell 6.6% in June, the biggest drop since the pandemic.

Tomorrow's widely anticipated release of the latest PCE index, the Fed's preferred inflation gauge, should give additional guidance on the course of interest rates this fall, and therefore gold's immediate prospects.

Benchmark 10-year Treasury yields and the dollar both inched lower. Platinum and palladium lost 2.6% and 3%, respectively.

At the New York spot close: gold fell $61.40 to $2,351.90; silver shed $1,18 to $27.81; platinum lost $24.70 to $937.10; and palladium retreated $28 to $896 an ounce.

7/24/2024: Gold rises as dollar falls

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold rose 0.4% to close above $2,413 as the dollar fell on mixed US data and growing certainty that the Fed will cut interest rates in September if not before. Silver edged down 0.2% to $29.06 an ounce.

The S&P US services index jumped in July to a 28-month high of 56, where any reading over 50 signifies expansion. Service-oriented firms like realtors, banks, and hospitals employ most Americans. But the manufacturing side of the economy fell to a six-month low of 49.5, according to the S&P survey. Employment across both sectors was flat.

Sales of new single-family homes tumbled to a seven-month low in June. The crucial housing market remains hamstrung by high mortgage rates and high prices.

The US trade deficit in goods narrowed in June by 2.5% on an upsurge in exports. It was the first lessening in five months. Smaller deficits typically support higher GDP.

The dollar slid 0.2% against major rivals and dropped to the lowest level against the yen in two months as the Bank of Japan appears to be leaning toward unwinding its ultra-loose monetary policies. A weaker dollar supports gold by making it cheaper overseas.

Growing certainty about rate cuts also weighed on the buck. Fed fund futures traders now put the odds of at least a quarter-point reduction in September at 100%, according to CME FedWatch, with the odds of at least one more by December at 97%.

While the odds of rate cut when the Fed meets next week are currently just 7%, former New York Fed President William Dudley said today that the central bank should reduce rates now to prevent further weakness in the labor market and possible recession. Dudley was formerly a policy hawk.

In a bullish move for the global market, India slashed import duties on gold and silver to 6% from 15%. India is the world's second-largest consumer of physical gold.

Platinum and palladium rose 1.5% and 1.4%, respectively.

At the New York spot close: gold rose $8.70 to $2,413.30; silver slipped 8 cents to $29.06; platinum picked i[p $13.80 to $961.80; and palladium advanced $12.90 to $924 an ounce.

7/23/2024: Gold tops $2,400 on rate view

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold gained 0.5% to close above $2,404 despite a slight rise in the dollar as Treasury yields retreated again on rate-cut expectations and changes in the presidential race, boosting alternative assets. Silver was nearly flat, adding a penny to finish at $29.13 an ounce.

Just days after President Biden chose to withdraw his candidacy, VP Kamala Harris has garnered enough support from delegates to clinch the Democrat nomination for president. Harris is seen as likely to continue Bidens fiscal policies whereas former president Donald Trump's promise to levy tariffs across the board are viewed as inflationary.

In a new Reuters poll, 82% of the 100 economists surveyed expect a quarter-point rate cut in September, with nearly 75% also expecting a second cut of the same size by December. Fed fund futures traders are even more dovish, with the odds of a September cut at 96% and another in December at 95%.

Benchmark 10-year Treasury yields rolled back on the rate view and speculation that Harris is more electable than Biden, so inflation is perhaps more likely to keep falling if she wins. Lower yields help gold by reducing the opportunity cost for holding it instead of bonds.

The dollar added 0.1% after China unexpectedly cut interest rates yesterday to boost its flagging economy.

Platinum edged down less than 0.1% while palladium rose 2%.

At the New York Spot close: gold gained $12.60 to $2,404.60; silver picked up cent to $29.13; platinum dipped 40 cents, to $948; and palladium picked up $18.30 to $911.10 an ounce.

7/22/2024: Gold lower after Biden exit

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold edged down 0.1% to close at $2,392 as Treasury yields crept higher and risk appetite returned following President Biden's decision not to seek re-election. Silver added 0/1% to finish at $29.14 an ounce.

Submitting to pressure after an abysmal debate performance weeks ago, Joe Biden announced yesterday that that he would step aside and endorse Vice President Kamala Harris as the Democrat candidate for President.

The move, while not entirely unexpected, throws additional uncertainty into an already uncertain political landscape as traders wait to see whether Harris can galvanize her party. While betting markets still see a 60% chance of a Trump victory this fall, the odds have slightly shifted away from the former President following Biden's decision.

Benchmark 10-year Treasury yields crept up above 4.26% on expectations that another Trump term could be inflationary, given his promise to increase tariffs dramatically. Higher yields weigh on gold by increasing the opportunity cost for holding it instead of bonds.

Despite the uncertainty, risk appetite took over on Wall Street, especially in the rate-sensitive tech sector. The Dow rose 0.3% while the S&P 500 added 1.1%. The tech-heavy Nasdaq jumped 1.6%. The dollar was virtually unchanged.

Traders are awaiting new GDP data for Q2 on Thursday and PCE inflation data on Friday for further clarity on the course of interest rates.

Platinum and palladium dropped 1.8% and 1%, respectively.

At the New York spot close: gold inched down $3.50 to $2,392; silver rose 4 cents to $29.12; platinum shed $17.50 to $948.40; and palladium slid $9.50 to $892.80 an ounce.

7/19/2024: Gold tumbles on profit-taking

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold tumbled 2.3% to close under $2,396 as Treasury yields and the dollar rebounded for a second session, prompting traders to take profits. The metal ended the week down 0.8%. Silver dropped 3% to finish at $29.09, notching a weekly loss of 5.8%.

With no significant economic data released today, profit-taking took control of the markets, pushing investors into cash while stocks, bonds and gold sold off after rallying sharply this week.

With last Friday's unexpectedly soft CPI capping three straight months of falling consumer inflation and weaker economic data, a litany of dovish comments followed from Fed officials including Fed Chair Powell, cementing expectations the Fed will begin a series of rate cuts in September.

Fed fund futures traders see a 98% chance of at least a quarter-point cut in September, followed by a series of further cuts in the ensuing months as the Fed tries to engineer a soft landing for the economy while continuing to smother inflation.

Stocks and bonds rallied on the easing prospects while gold rocketed 3.8% higher early in the week, closing at a new all-time above $2,462 on Wednesday. Today's largely unmotivated retractions signaled that the markets got ahead of themselves, with exuberance causing over-bought positions ripe for taking profits despite bullish fundamentals.

All three major equity indexes retreated around 0.8% while Benchmark 10-year Treasury yields, which move inversely to bond prices and therefore bond demand, rebounded above 4.2%. Higher yields pressure gold by increasing the opportunity cost for holding it instead of bonds.

The dollar added 0.2% for the day and week, snapping a two-week losing streak as traders went to cash. A stronger dollar weighs on gold and other commodities by making them pricier in other currencies.

Platinum slid 1.2% today and 3.9% this week. Palladium shed 2.9% for a weekly decline of 7.2%.

At the New York spot close: gold fell %56.30 to $2,395.50; silver slid 91 cents to $29.09; platinum dropped $12.20 to $966.20; and palladium shed $26.90 to $902.30 an ounce.

7/18/2024: Gold hovers near record highs

Source: Bill Musgrave, American Gold Exchange

Austin — After closing at a new all-time high above $2,462 on Tuesday, New York spot gold consolidated its gains for a second session, edging down 0.1% to finish under $2,452. Mixed US data and upticks in Treasury yields and the dollar weighed on the metal as traders try to weigh the extent of imminent easing by the Fed. Silver shed 0.5% to close at $30 an ounce.

The Conference Board reported its index of leading economic indicators fell 0.2% in June for its fourth straight monthly decline, signaling a slowdown in US growth. The LEI has only risen once in the past 30 months, in February.

First-time jobless claims jumped 20,000 to 243,000 last week, close to a one-year high, in part because of Hurricane Beryl's landfall in Texas. But stripping out the effects of Beryl, new claims increased and are trending up, suggesting layoffs are rising.

One the positive side, The Philly Fed factory index surged to 13.9 in July from 1.3 in June, where any reading above zero indicates expansion. It was the sixth straight positive reading.

Fed fund futures traders are beginning to question the extent of the pending easing cycle by the Fed. While the odds of a September rate cut hold at 98%, the likelihood of five or six cuts by next June has diminished slightly as traders consider the potentially inflationary tariffs promised in a second Trump administration.

Benchmark 10-year Treasury yields edged up near 4.2% on the shifting longer-term rate view, pressuring gold by increasing the opportunity cost for holding it instead of bonds for safety.

Tracking higher with yields, the dollar added 0.4% against major rivals, making gold and other commodities pricier in other currencies.

Platinum and palladium dropped 2.2% and 2.6%, respectively.

At the New York spot close: gold dipped $3.80 to close at $2,481.50; silver slid 14 cents to $30; platinum shed 22.20 to $978.40; and palladium retreated $25 to $929.20 an ounce.

7/17/2024: Gold dips on profit-taking

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold dipped 0.3% to close under $2,455 despite downticks in Treasury yields and the dollar as traders took profits from yesterday's all-time high close above $2,462. Silver fell 3.5% to finish at $30.14.

Two more Fed officials signaled that their growing comfort with the idea of cutting interest rates this fall. Fed governor Christopher Waller said the central bank is "getting closer" to lowering interest rates after three straight months of cooling inflation. New York Fed President John Williams echoed that sentiment but added that a rate cut in July in unlikely.

Reinforcing rate-cut expectations, the Fed's Beige Book reported "slight to moderate" activity overall for the US economy, with five of 12 districts registering no increase or a downturn. Firms are expecting slower growth going forward with softening labor conditions.

Fed fund futures project the odds of a September rate cut at 98%, down from nearly 100% yesterday, according to CME FedWatch.

Benchmark 10-year Treasury yields continued to slide on the rate view, supporting gold by decreasing the opportunity cost for holding it instead of bonds for safety.

The dollar dropped 0.5% against major rivals led by the yen, which rallied on speculation that the BOJ is intervening to prop it up.

Platinum and palladium each slid 0.3%.

At the New York spot close; gold dipped $7.60 to $2,454.80; silver shed $1.06 to $30.14; platinum edged down $3.10 to $1,000.60; and palladium retreated $2.60 to $954.20 an ounce.

7/16/2024: Gold surges to new all-time high

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold surged another 1.6% to close at a new all-time high above $2,462, driven by growing expectations that a cooling economy and falling inflation will spur the Fed to multiple rate-cuts this fall. Silver jumped 1.7% to finish at $31.20 an ounce.

After last Friday's weaker-than-expected CPI report showed consumer inflation falling to 3% for the first time in a year, a chorus of Fed officials have voiced their belief that the conditions have been met for reducing interest rates.

Fed Chair Jerome Powell said yesterday that three straight months of falling inflation "add somewhat to confidence" that inflation is falling sustainably. San Francisco Fed Bank President Mary Daly also said "confidence is growing" that inflation is heading toward the 2% goal. Chicago Fed President Austan Goolsbee said the falling CPI "is what the path to 2% looks like.”

Fed fund futures traders are now pricing in a September rate cut of at least 25 basis points with 99.8% certainty, according to CME FedWatch. In addition, the odds of three quarter-point cuts by December have risen to more than 50%, and a total of five or six cuts are now expected by next June.

This is a radical change from just a month ago, when traders were uncertain whether any reduction would be forthcoming this year.

Falling rates support gold by weakening the dollar and lower yields, boosting demand for alternative stores of value. The metal has now climbed nearly 20% this year after adding 13% last year.

Benchmark 10-year Treasury yields retreated further under 4.2% on the dovish rate view, boosting gold by decreasing the opportunity cost for holding it instead of bonds for safety.

Gold is also gathering support from safe-haven inflows after the assassination attempt of Donald Trump last weekend fueled political uncertainty and volatility in the markets.

Platinum picked up less than 0.1% while palladium rose 0.6%.

At the New York spot close: gold surged $39.50 to $2,462.40; silver climbed 52 cents to $31.20; platinum added 80 cents, to $1,00.73; and palladium rose $5.60 to $956.80 an ounce.

7/15/2024: Gold rises on rate view

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold gained 0.4% to close near $2,423 on rate-cut hopes and safe-haven inflows after soft inflation data last week and the failed assassination attempt on Donald Trump over the weekend. Silver slipped 0.7% to finish at $30.67 an ounce.

Speaking at the Economic Club of Washington today, Fed Chair Jerome Powell said three straight months of falling inflation "add somewhat to confidence" that inflation is falling sustainably to the Fed's 2% target. Powell has said repeatedly that the Fed needs this confidence before it starts unwinding interest rates.

The comments came after the most recent consumer price index, released last week, showed inflation falling in June for the first time in four years, pulling the annual rate down to 3%, the lowest in a year.

Fed fund futures traders now see a 94% likelihood of at least a quarter-point cut in September, with a second cut expected by December. Lower rates support gold by lowering the dollar and Treasury yields. A weaker dollar makes gold cheaper overseas while lower yields reduce the opportunity cost for holding it instead of bonds.

Adding to the dovish rate view, New York's Empire State factory gauge contracted for the eight straight month in July.

Gold also received support from flights to quality after a gunman shot at Donald Trump over the weekend, wounding his ear. The assassination attempt has increased his chances of winning the November election, according to betting markets, and is expected to increase volatility in bonds and stocks.

Platinum and palladium slid 0.3% and 2.2%, respectively.

At the New York spot close: gold gained $8.90 to $2,422.90; silver slid 21 cents to $30.67; platinum edged down 2.80 to $1,002.90; and palladium shed $21.10 to $951.20 an ounce.