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


9/18/2020: Gold rises for a second week

Source: Bill Musgrave, American Gold Exchange

Austin — Gold rose 0.6% to close above $1,962 as softer US data cast a pall over the recovery, stifling risk appetite and boosting demand for safe havens. The metal notched its second straight weekly increase of 0.7%.

The Conference Board's index of Leading Economic Indicators slowed for a second month, rising 1.2% in August after 2% in July and 3.1% in June. A weighted gauge of 10 indicators, the LEI signals fluctuations in business cycles. It's slowing suggests the summer's rebound may be stalling out.

The US current account deficit surged in Q2, according to the Commerce Dept, as the spring's pandemic closures weighed far more heavily on exports more than imports. Representing 3.5% of GDP for the period, it was the biggest slice of the economy since Q4 of 2008. Large deficits typically create headwinds for GDP growth and can undermine investor confidence.

On a more positive note, consumer sentiment inched up in September, according to the University of Michigan survey, rising to 78.9 from 74.1 in August. But the survey also showed consumers becoming more pessimistic about their finances following the expiration of Federal unemployment benefits at the end of July. Income uncertainty in Q3 and Q4 may curtail consumer spending, which constitutes around 70% of GDP.

Wall Street rolled back on the downbeat data, with the Dow falling 0.6% and the S&P 500 0.9%. The tech-heavy Nasdaq fell 1.1%. President Trump's order banning TikTok and WeChat downloads added to economic tensions with China and pressured the tech sector.

The dollar fell 0.2% against major rivals led by the yen, which surged to a seven-week high on safe-haven inflows. Loose monetary policies from the Fed, uncertainty over US elections, and rising China trade tensions all weighed on the buck. A weaker dollar supports gold and other commodities by making them less expensive overseas.

The other precious metals were higher for the day and mixed for the week. Silver added 0.1% for a weekly rise of 1%. Platinum recouped 0.8% but still dipped 0.1% for the week. Palladium gained 2% today and 2.3% this week.

At the Comex close: December gold gained $12.20 to $1,962.10; December silver picked up 3 cents $27.13; October platinum added $7.60, to $938.50; and December palladium climbed $45.50 to $2,380.80 an ounce.


9/17/2020: Gold falls on Fed disappointment

Source: Bill Musgrave, American Gold Exchange

Austin — Gold fell 1.1% to close under $1,950 as traders, disappointed that the Federal Reserve did not unveil deeper easing measures, took profits from the metal's three-day winning streak.

Following its two-meeting on monetary policy, the Fed published a statement yesterday that, as expected, leaned into its new framework of inflation averaging. Rather than raising rates to prevent inflation from exceeding its target 2%, the central bank will now allow inflation to run hotter than 2% for as long it had been under the target.

In addition, the Fed emphasized that interest rates will remain near zero at least until the end of 2023.

Both policy positions are extremely dovish in themselves and bullish for gold in the longer term. Low interest rates undercut the dollar by shifting yield differentials in favor of competing currencies, which supports gold and other commodities by making them less expensive overseas.

In addition, near zero rates ensure that inflation-adjust bond yields will be negative for years to come, eliminating the opportunity cost for holding gold rather than bonds. And finally, gold is a traditional go-to asset for investors seeking to hedge against rising inflation.

But the Fed's statement nonetheless disappointed gold traders who were speculating that the Fed would unveil even deeper easing measures to support recovery from the COVID recession. With inflation averaging and low interest rates already priced into the market, traders took profits from gold's three session rise despite a lower dollar and falling bond yields, which typically support the metal.

The other precious metals were also lower, with silver dropping 1.4% while platinum and palladium lost 4.4% and 3.4%, respectively.

At the Comex close: December gold dropped $20.60 to $1,949.90; December silver fell 38 cents to $27.10; October platinum shed $42.60 to $930.90; and December palladium lost $82.30 to $2,335.30 an ounce.


9/16/2020: Gold rises, extends gains after Fed

Source: Bill Musgrave, American Gold Exchange

Austin — Gold gained for a third session, adding 0.2% to close above $1,970, on weak retail data and expectations of a dovish outcome to the FOMC meeting on monetary policy. The metal than pushed above $1,974 in electronic trade after the Fed pledged to keep interest rates near zero for at least three years.

US retail sales slowed for the third straight month, rising by 0.6% in August, as consumers hit the brakes on spending because of COVID-19 resurgence and fading fiscal stimulus. So-called core sales, a closer measure of the consumer spending portion of GDP, fell 0.1%.

The weaker sales data is the latest report signaling a slowdown in the initial recovery from coronavirus lockdowns last spring. Manufacturing and job growth also faltered in August while new filings for jobless benefits rose sharply, suggesting another round of layoffs. Nearly 30 million Americans are now on unemployment.

In the statement following its two-day meeting, the Fed said it will keep interest rates near zero until the end of 2023, and even longer if necessary, to return conditions to "maximum employment."

In keeping with its new policy framework announced last month, the central bank also said it will let inflation "moderately exceed 2% for some time," all but ensuring that real interest rates (rates adjusted for inflation) will remain negative for years to come.

The dovish Fed stance on rates and inflation is bullish for gold, which thrives when real yields are low or negative because they eliminate an opportunity cost for holding the metal, which offers no yield itself. And gold is often sought by investors during periods of rising inflation as a hedge against loss of purchasing power.

The other precious metals were mostly higher, with silver edging up less than 0.1% while platinum slipped 0.9% and palladium rose 0.1%.

At the Comex close: December gold gained $4.30 to $1,970.50; December silver added one cent, to 27.48; October platinum dropped $8.70 to $973.50; December palladium rose $3.10 to $2,417.60 an ounce.


9/15/2020: Gold edges higher on Fed view

Source: Bill Musgrave, American Gold Exchange

Austin — Gold edged up 0.1% to close above $1,966 as the dollar fell on slowing US factory production and expectations the Federal Reserve will emphasize easy money at its meeting on policy, which starts today.

Industrial output cooled in August, according to Fed reports, rising 0.4% as the effects of COVID-19 and the expiration of fiscal stimulus took their toll. It was the fourth month of progressively smaller gains since the lockdowns were first lifted in May.

Manufacturing expanded 1%, according to the same report, after rebounding by 6.1% in June and 3.5% in July. The index remains 7.3% below pre-pandemic levels.

Separately, the Empire State Fed region's index of business conditions rose by more than expected this month, adding a bright spot to an overall picture of slowing momentum. New orders climbed out of contraction while inventories remained in negative territory.

The Federal Reserve began its two-day meeting on monetary policy, the first since Fed Chair Jerome Powell announced the new framework of inflation averaging at the virtual Jackson Hole meeting of global central bankers last month. This revised approach will let inflation run above 2% for extended periods to promote job growth, effectively keeping interest rates lower for longer.

The dollar fell 0.3% on expectations that the Fed will affirm its pledge to keep rates near zero until well into 2023. Lower rates undermine the dollar by encouraging Forex traders to shift to other currencies that produce higher yield. A weaker dollar, in turn, supports gold and other commodities priced in it for global trade by making them less expensive overseas.

The other precious metals were also higher, with silver adding 0.4% while platinum and palladium rose 2.5% and 3.9%, respectively.

At the Comex close: December gold picked up $2.50 to $1,966.20; December silver added 11 cents, to $27.46; October platinum rose $23.50 to $982.20; and December jumped $90.10 to $2,414.50 an ounce.


9/14/2020: Gold extends rally on weaker buck

Source: Bill Musgrave, American Gold Exchange

Austin — Adding to last week's 0.7% rally, gold gained another 0.8% to close near $1,964 as vaccine hopes and expectations of deeper dovishness from the Fed undercut the dollar, boosting alternative stores of value. It was the metal's biggest one-day rise in more than two-weeks.

Oxford University resumed clinical trials of a promising COVID-19 vaccine, lifting equity markets hungry for an end to the pandemic. Developed jointly with AstraZeneca, the drug is considered one of the strongest contenders now in process. Trials had been suspended recently because of suspected side effects on one participant.

Wall Street rallied as mergers activity, along with the vaccine news, stoked risk appetite. Driven by tech shares, the Dow and S&P 500 gained 1.1% and 1.2%, respectively, while the tech-heavy Nasdaq added 1.7%. Oracle led way, rising more than 5% after reports that will acquire the rights to TikTok in the US, beating out Microsoft.

The dollar fell 0.3% against major rivals, dropping to a two-week low against the yen as traders speculate that the Fed will lean into deeper monetary easing when it meets this week. A weaker dollar supports gold and other commodities by making them less expensive in other currencies.

The central bank recently announced a new policy of letting inflation run above its 2% target for extended periods, reinforcing its pledge to keep interest rates low for longer. Gold has risen nearly 30% this year behind global monetary easing and negative real interest rates, both of which are expected to go on for the foreseeable future as the global economy struggles to emerge from the pandemic recession.

The other precious metals were mostly higher, with silver and platinum rising 1.9% and 2%, respectively, while palladium dipped 0.3%.

At the Comex close: December gold gained $15.80 to $1,963.70; December silver rose 50 cents to $27.36; October platinum climbed $19.20 to $958.70; and December palladium dipped $6.40 to $2,324.40 an ounce.


9/11/2020: Gold dips, notches weekly win

Source: Bill Musgrave, American Gold Exchange

Austin — Gold dipped 0.8% to close under $1,948 as traders took profits from its three-day rally despite sharply higher consumer inflation and volatility on Wall Street. The metal still notched a weekly win of 0.7%, driven by uncertainty over geopolitics and the COVID recovery.

Consumer inflation jumped for the third consecutive month, with the CPI adding 0.4% behind the biggest rise in used car prices in 50 years. The core CPI, stripping out volatile food and energy prices, also rose 0.4%.

Wall Street was mixed for the day. The Dow and S&P 500 swung from early losses and late-session gains of 0.6% and 0.2%, respectively, in very choppy trade. The tech-heavy Nasdaq fell 0.4% for its fifth loss in six days. All three indexes were lower for the second straight week.

The dollar was nearly flat, easing less than 0.1% against major rivals on the strength of the ECB's decision this week to hold interest rates steady and support the rising euro.

Despite today's profit-taking, gold was lifted this week by trade tensions and new signs that the recovery is beginning to flatline. Nearly 1.7 million Americans filed for first-time jobless claims last week, state and federal combined, as new claims rose for the third straight week.

Meanwhile, President Trump vowed this week to "decouple" economically from China if re-elected, floating the idea of "massive" new tariffs and penalties for companies doing business with Beijing. And Boris Johnson, Britain's PM, threatened to unilaterally override Brexit provisions, throwing the prospects for an orderly transition into new disarray.

The other precious metals were mixed for the day and week. Silver dropped 1.6% but still rose 0.5% this week. Platinum dipped 0.2% on the day but rallied 4.6% on the week. Palladium was nearly flat today and lost 0.5% this week.

At the Comex close: December gold fell by $16.40 to $1,947.90; December silver shed 43 cents to $26.86; October platinum slipped $1.40 to $939.60; and December palladium dropped a dime to $2,330.80 an ounce.


9/10/2020: Gold gains for third session

Source: Bill Musgrave, American Gold Exchange

Austin — Gold gained 0.5% to close at a one-week high above $1,964 as rising unemployment claims cast a shadow on the US recovery and the ECB left rates unchanged, strengthening the euro at the dollar's expense. The metal has risen for three consecutive sessions.

Nearly 1.7 million Americans filed for first-time jobless claims last week, state and federal combined. With new claims rising for three straight weeks and new layoffs hitting the travel and hospitality industries, the summer recovery in the labor market appears to be grinding to halt.

Wall Street shifted from gains to losses as the rising jobless claims underscored the uncertainty facing the US economy. The Dow lost 0.8% while the S&P 500 and Nasdaq fell 0.9% and 1%, respectively. Safe-haven Treasurys rose alongside gold, pressuring yields.

The dollar extended its recent losses, dropping another 0.2% against major rivals led by the euro after the ECB left interest rates unchanged and ECB head Christian Lagarde signaled support for the shared currency's recent strength against the dollar.

A rising euro pulls Forex traders away from the dollar in search of higher yields. A weaker dollar, in turn, supports gold and other commodities by making them less expensive in other currencies.

The other precious metals were also higher, with silver rising 0.8% while platinum and palladium added 1.7% and 0.6%, respectively.

At the Comex close: December gold gained $9.40 to $1,964.30; December silver rose 21 cents to $27.29; October platinum climbed $16.10 to $941; and December palladium added $12.70, to $2,330.90 an ounce.


9/9/2020: Gold rises on dollar weakness

Source: Bill Musgrave, American Gold Exchange

Austin — Rising for a second session, gold added 0.6% to close near $1,955 despite rebounding equities after an improving outlook for the Eurozone weakened the dollar, boosting demand for alternative stores of value.

The European Central Bank is expected to revise its GDP forecasts higher when it meets tomorrow, reflecting a positive view of economic recovery from the coronavirus pandemic. Monetary policy is projected to be supportive of the euro and deeper monetary easing is unlikely, according to reports.

The dollar fell nearly 0.3% from a four-week high, pressured by strength in the euro following the optimistic expectations for the region. Commodity currencies like the New Zealand and Australian dollar, which are often read as a gauge of risk appetite, also rose sharply against the buck.

A falling dollar supports gold and other commodities priced in it for global trade by making them less expensive in other currencies.

Gold's gains came despite a rise in risk appetite as Wall Street rebounded on bargain-hunting after a three-day selloff. The Dow added 1.6% while the S&P 500 rose 2%. One day after plunging more than 4% into correction territory, the tech-heavy Nasdaq recouped 2.7%, led by behemoths like Apple, Microsoft, and Amazon, which have benefited from the new stay-at-home economy created by COVID-19.

The other precious metals were also higher, with silver picking up 0.3% while platinum and palladium rose 1.6% and 0.5%, respectively.

At the Comex close: December gold gained $11.70 to $1,954.90; December silver added 9 cents, to $27.08; October platinum climbed $14.60 to $924.90; and December palladium picked up $12.40 to $2,318.20 an ounce.


9/8/2020: Gold gains on global tensions

Source: Bill Musgrave, American Gold Exchange

Austin — Gold gained 0.5% to finish above $1,943, close to a one-week high, as renewed Brexit and China tensions fueled a selloff in stocks, stoking demand for safe havens.

British PM Boris Johnson threatened to override portions of the divorce agreement between Britain and the EU, throwing Brexit talks again into disarray. Johnson said he was ramping up preparations to exit with no trade agreement in place, which would destabilize the pound and euro.

Adding to global tension, President Trump vowed yesterday to "decouple" from China economically by scaling back trade in his second term if re-elected. He floated "massive" new tariffs and penalties for companies that continue doing business with Beijing.

The hardline rhetoric on both sides of the Atlantic rattled equity markets, with the Dow and S&P 500 fell 2.3% and 2.8%, respectively, while the tech-heavy Nasdaq tumbled 4.1% on concerns that sanctions against China may extend to chipmaker SMIC, a key part of many supply chains.

Treasury yields fell sharply as investors shifted out if risk assets and toward safe havens.

The dollar rose 0.8%, also on safe-haven inflows, as the UK pound plunged on the Brexit turmoil. A rising dollar typically weighs on gold and other commodities by making them more expensive in other currencies.

The other precious metals were mostly higher, with silver and platinum rising 1% and 1.4%, respectively, while palladium slipped 1.6%.

At the Comex close: December gold gained $8.90 to $1,943.20; December silver rose 28 cents to $26.99; October platinum added $12.10, to $910.30; and December palladium dropped $37.40 to $2,305.80 an ounce.


9/4/2020: Gold dips on strong jobs growth

Source: Bill Musgrave, American Gold Exchange

Austin — Gold dipped 0.2% to close under $1,935 after strong gains in the labor market undercut the prospect for additional fiscal stimulus from Congress, bolstering the dollar and pressuring alternative stores of value. The metal lost 2.1% for the week.

US nonfarm payrolls added 1.4 million jobs in August, beating forecasts and pushing the unemployment rate down to 8.4%. While trending in the right direction, job gains have slowed after the upsurge in June caused by the economy's emergence from lockdowns.

Around 20% of the new hires were temporary workers for the US census, and more than 11 million Americans remain out of work because of the coronavirus pandemic.

Pressuring gold and other commodities priced in it for global trade, the dollar rose against major rivals on speculation that the upbeat jobs numbers will decrease the likelihood of further fiscal stimulus in the near term. Additional aid had already stalled in the Senate over concerns about the exploding budget deficit, which has stretched to an all-time high above $3 trillion.

The other precious metals were mixed for the day and week. Silver slid 0.6% for a weekly loss of 3.3%. Platinum rose 1% today but fell 4.5% this week. Palladium added 0.9% for a weekly rise of 5%.

At the Comex close: December gold slipped $3.50 to $1,934.30; December silver dropped 16 cents to $26.71; October platinum gained $8.60 to $898.20; and December palladium climbed $21.90 to $2,343.20 an ounce.

  

Metal Ask      Change
Gold $1,908.84           Price Change Down Arrow $-43.24
Silver $24.62           Price Change Down Arrow $-2.31
Platinum $894.05           Price Change Down Arrow $-43.94
Palladium $2,307.05           Price Change Down Arrow $-81.72
In US Dollars