AGE Daily Gold Update

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

10/17/2018: Gold edges lower on Fed minutes

Source: Dana Samuelson, American Gold Exchange

Austin — Gold edged slightly lower, dipping 0.3% in quiet trading, closing the New York session at $1,227.40 after trading in a narrow 1% range overnight.

Fed minutes from the Sept. 25 – 26, FOMC meeting, released after the New York session close, did little to move the precious metals markets. The minutes revealed that Fed policymakers were unanimous in their decision to raise U.S. interest rates 0.25% last month. The minutes also indicated the FED was considering a modestly tighter or “restrictive” monetary policy going forward due to continuing U.S. economy strength. “Almost all participants saw little change in their January assessment of the economic outlook, although a few of them judged that recent data pointed to a pace of economic activity that was stronger than they expected earlier in the year,” according to the minutes. Analysts continue to expect a 4th Fed rate hike of 0.25% this year at the conclusion of their Dec. 18-19 meeting.

While precious metals prices were little changed following the Fed news, stocks reacted adversely, giving up gains made earlier in the session and closing down on the day. Stocks, which have thrived on cheap money, have seen increased volatility over the last several weeks as yields on U.S. treasuries have punched higher. The U.S. dollar index gained 0.50% to 95.59 following the Fed news, but the stronger dollar had little impact on precious metals prices, despite the natural inverse correlation between the dollar and gold.

At the Comex close: December gold slid $3.60 to $1,227.40; December silver futures dipped 4 cents to $14.66; January platinum fell $6.10 to $840.60; and December palladium fell $9.90 to $1,064.00 an ounce.

10/16/2018: Gold edges up on haven bids

Source: Bill Musgrave, American Gold Exchange

Austin — Gold edged slightly higher, adding less than 0.1% to close at $1,231, as geopolitical tensions continued to buoy safe-haven demand despite a sharp rally in US equities.

Italy's contentious budget showdown with the EU, the ongoing trade war between the US and China, and the erosion of support for UK PM Theresa May's Brexit plan kept global turmoil simmering for another day, pushing gold prices to new multi-month highs.

The developing crisis between Saudi Arabia and the US over a murdered journalist also raised the temperature. Responding to accusations about its role in the death of Washington Post columnist Jamal Khashogg, who had written critically of the new crown prince, the world's largest oil producer made a veiled threat to undermine the global economy if sanctioned, effectively weaponizing its oil output.

Gold's gains were limited by a sharp rally in US equities, driven by strong earnings reports from several blue-chip firms. The Dow and S&P 500 gained around 2.2% while Nasdaq surged 3%. The dollar traded virtually flat.

Upbeat US data also stoked risk appetite after the Fed reported industrial production rose a solid 0.3% in September. Separately, home-builder confidence edged higher as strong demand offset worries about the effects of tariffs on the price of building materials.

The other precious metals were mostly higher, with palladium and platinum adding 0.4% and less than 0.1%, respectively, while outlier silver slipped 0.2%.

At the Comex close: December gold picked up 70 cents to $1,231; December silver futures dipped 3 cents to $14.70; January platinum added 40 cents, to $846.70; and December palladium climbed $4.30 to $1,073.90 an ounce.

10/15/2018: Gold rises to two-month high

Source: Bill Musgrave, American Gold Exchange

Austin — Gold rose 0.7% to close above $1,230, a two-month high, as geopolitical turmoil in Europe and the Middle East pressured the dollar and boosted demand for safe-haven assets.

Brexit negotiations between the UK and EU broke down on the handling of goods crossing the border between North Ireland, part of the UK, and the Republic of Ireland, which has remained a member of the EU. Britain wants no customs levied, while the EU wants the border treated like any other.

Elsewhere in Europe, Italy is moving forward with its controversial budget proposal, with a target deficit of 2.4% of GDP, far higher than allowed under EU austerity rules. And in Germany, the far-right Alternative party won enough votes to enter Bavaria's parliament while Prime Minister Angela Merkel's allies took a beating, raising questions about the stability of her government.

Relations between the US and Saudi Arabia are becoming strained after reports that a US-affiliated journalist was murdered within the Saudi embassy in Istanbul after writing critically of King Salman. The Saudi's have threatened to use their oil production as a weapon, disrupting global supply, if they come under sanctions.

The dollar fell 0.3% against major rivals as Forex investors shifted into safe-haven currencies like the yen and Swiss franc. Also pressuring the buck, the US budget deficit soared to $779 billion in the fiscal year ending with September, an increase of $113 billion. And retail sales grew by a scant 0.1% for a second straight month in September, far less than expected.

The other precious metals also gained, with silver adding 0.6% while platinum and palladium picked up 0.7% and 1.6%, respectively.

At the Comex close: December gold gained $8.30 to $1,230.30; December silver added 9 cents, to $14.73; January platinum rose $6.30 to $846.30; and December palladium climbed $17.40 to $1,078.20 an ounce.

10/12/2018: Gold eases into 1.4% weekly win

Source: Bill Musgrave, American Gold Exchange

Austin — Gold eased 0.5% to close at $1,222 as a mild rebound in stocks and the dollar caused traders to take profits from its three-day rally of 3.3%. The metal still finished 1.4% higher for the week to notch its second straight weekly win.

After plunging 5.2% in two days, the Dow edged up 0.6% with bargain-hunters entering the market. Tech shares and financials led the way on some solid earnings, while reports that China posted a record trade surplus with the US in September helped to soften concerns about slowing global growth.

The dollar ended its three-day slide, edging 0.2% higher after the People's Bank of China weakened the yuan and the euro dropped 0.3% on Italy's ongoing fiscal drama. Resisting EU austerity measures, the deeply indebted nation plans to spend 2.4% of GDP in its annual budget, bringing it into conflict with its creditors.

US import prices rose 0.5% in September, according to the BLS, after dropping 0.4% in August. For the 12 months ending in September prices have risen 3.5%. Export prices remained flat.

The other precious were mixed on the day and week. Silver rose 0.2% today but lost 0.1% this week. Platinum lost 0.8% for the day but gained 1.9% for the week. Palladium dropped 1.3% today and 0.1% this week.

At the Comex close: December gold eased $5.60 to $1,222; December added 3 cents, to $14.64; January platinum dropped $6.60 to $840; and December palladium lost $14 to $1,055.80 an ounce.

10/11/2018: Gold surges on safe-haven demand

Source: Bill Musgrave, American Gold Exchange

Austin — Gold surged 2.9% to close near $1,228, the highest level in more than two months, as global equities extended their selloff, spurring demand for safe-haven assets.

Following yesterday's 3.2% plunge, the Dow lost another 2.1% as worries about trade wars, rising interest rates, and higher bond yields shook investors faith in the nine-year US bull market in stocks. The S&P 500 also shed another 2.1%, for cumulative losses of 6% over the past six sessions.

The so-called Wall Street fear gauge, the VIX volatility index, jumped to the highest point in eight months. Global equites, as measured by the MSCI World Index, fell to a one-year low on contagion from the US markets.

President Trump blasted the Federal Reserve as the cause of the selloff, railing against its three rate hikes this year as "crazy" and "loco." While such finger-pointing is unlikely to sway future Fed policy decisions, it helped to pressure the dollar into a 0.5% loss against major rivals. A falling dollar supports gold and other commodities priced in it for global trade b y making them less expensive overseas.

Safe-haven currencies like the yen and Swiss franc also drew forex investors away from the buck, and the UK pound rallied on growing optimism that a Brexit agreement will be reached with the EU. US Treasurys also rallied on safe-haven inflows, stemming this week's rise in yields.

The other precious metals were also higher, with silver and platinum jumping 2% and 2.3%, respectively, while palladium added 0.5%.

At the Comex close: December gold surged $34.20 to $1,227.60; December silver jumped 28 cents to $14.61; January platinum gained $19.30 to $846.60; and December palladium added $8, to $1,075.20 an ounce.

10/10/2018: Gold rises as stocks tumble

Source: Bill Musgrave, American Gold Exchange

Austin — Gold gained for a second session, adding 0.2% to close above $1,193, as tumbling equities and a softer dollar spurred demand for alternative assets.

Global equities fell sharply, with the Dow and S&P 500 plunging 3.2% while the Nasdaq plummeted 4%, as trade worries and rising Treasury yields caused investors to shed risk. The IMF warned this week that tariffs and protectionism will shave nearly 1% from global growth by 2019, according to forecasts.

Yields on benchmark 10-year Treasury notes to just under the seven-year high after the BLS reported wholesale prices rose 0.2% in September and 2.6% for 12 months. Rising inflation causes bondholders to sell off lower yielding notes, driving yields higher.

The dollar dropped 0.2% against major rivals led by the pound and euro as officials of the EU signaled a compromise Brexit deal may be struck, allowing the UK to remain within the EU customs regime. A falling dollar typically supports gold and other commodities by making them less expensive in other currencies.

The other precious metals were mixed, with palladium rising 0.5% while silver and platinum fell 0.5% and 0.2%, respectively.

December gold added $1.90, $1,193.40; December silver slid 7 cents to $14.33; January platinum fell $1.60 to $827.30; and December palladium rose $5.10 to $1,067.20 an ounce.

10/9/2018: Gold gains on safe-haven bids

Source: Bill Musgrave, American Gold Exchange

Austin — Gold gained 0.2% to close near $1,192 as worries about the global economy pressured the dollar, boosting demand for safe-haven assets.

The IMF downgraded its forecast for global growth in 2018 and 2019 to 3.7% because of weakness in advanced economies, higher prices, and headwinds from rising trade tensions. The US, Eurozone, UK, Japan, and China all project substantially slower growth next year, according to the IMF's model.

The dollar slipped 0.2% against major rivals, led by the pound and yen, on continuing worries about the Italy's banks and budget. The yield on Italian government bonds jumped to a 3% premium over safe-haven German paper on concerns about Italy's fiscal solvency, given the government's insistence on setting its budget deficit at 2.4% of GDP, far higher than allowed by its EU creditors.

Yields on benchmark 10-year US Treasury notes retreated from a seven-year high, which also weighed on the buck.

The other precious metals were mixed, with silver rising 0.5% while platinum and palladium fell 0.7% and 0.6%, respectively.

At the Comex close: December gold gained $2.90 to $1,191.50; December silver added 7 cents, to $14.40; January platinum lost $6.20 to $828.90; and December palladium fell $6.80 to $1,062.10 an ounce.

10/8/2018: Gold falls on dollar, yields

Source: Bill Musgrave, American Gold Exchange

Austin — Gold fell 1.4% to close under $1,189 as economic weakness in China and strength in the US boosted the dollar and bond yields, undermining demand for alternative stores of value

Trying to offset the headwinds caused by US tariffs, China's central bank cut the cash-reserve requirements for Chinese banks to lower finance costs and stimulate growth. China's stock markets have tumbled in recent weeks, raising concerns about overall health of the global economy.

The dollar gained 0.2% against major rivals as traders speculated that upbeat US data will encourage the Fed to maintain its pace of quarterly rate hikes. The US unemployment rate fell to 3.7% in September, a 49-year low, according to Friday's release of the nonfarm payrolls report. And the ISM reported last week that services industries posted their strongest growth in 21 years last month.

The dollar was also buoyed by last week's sharp rise in yields for long-dated US Treasury notes, themselves responding to the solid US economic data and concerns about higher inflation. A rising dollar pressures gold and other commodities by making them more expensive in other currencies.

The other precious metals were mostly lower, with silver and platinum dropping 2.2% and 0.8%, respectively, while palladium rose 1.1%.

At the Comex close: December gold lost $17 to $1,188.60; December silver fell 32 cents to $14.33; January platinum dropped $6.60 to $818.30; and December palladium rose $11.80 to 1,068.90 an ounce.

10/5/2018: Gold rises on tepid jobs data

Source: Bill Musgrave, American Gold Exchange

Austin — Gold gained 0.3% to close near $1,206 as weaker-than-expected jobs data pressured the dollar, boosting demand for alternative stores of value. The metal finished the week with a rise of 0.8%.

US nonfarm payrolls added 134,000 jobs in September, the fewest in a year, as retail and the leisure/hospitality industries lost workers. Totals for July and August were revised higher by 87,000 jobs, however, pushing the unemployment rate down to 3.7%.

Wage growth was flat for the month, pulling the annual rate down slightly to 2.8% and reducing concerns that inflation will accelerate beyond the Fed's 2% target. The dollar softened 0.1% against major rivals as traders speculated that the tepid data eases pressure on the Fed to accelerate the pace of rate hikes.

The other precious metals were mostly higher for the day and mixed for the week. Silver added 0.4% today but lost 0.4% this week. Platinum was unchanged for the day and 0.3% higher for the week. Palladium jumped 1.1% today but finished week 1.5% lower.

At the Comex close: December gold gained to $1,205.60; December silver added 6 cents, to $14.65; January platinum was flat at $824.50; and December palladium jumped $11.60 to $1,057.10 an ounce.

10/4/2018: Gold steady despite upbeat data

Source: Bill Musgrave, American Gold Exchange

Austin — Gold was little changed, dipping 0.1% to close under $1,202, as safe-haven buying early was neutralized by strong US economic data, which boosted expectations for higher interest rates from the Fed. The metal had risen above $1,210 in intraday trading on weakness in US stocks, only to fall back at the close after ADP reported strong jobs gains.

Factory orders jumped 2.3% in August to an 11-month, beating forecasts and adding to the sense that GDP growth will be strong to end 2018. Separately, ADP reported that the private sector added 230,000 jobs in September, the most since February, signaling that the red-hot job market is not cooling off.

Long-term bond yields continued to surge as upbeat data increased the likelihood of higher inflation, causing bondholders to sell lower-yielding notes. Traders now expect four rate hikes from the Fed next year, in addition to one in December, which will further support higher yields.

Higher bond yields and expectations of tighter monetary policy combined to hammer stocks, with the Dow and Global Dow dropping 0.8% while Nasdaq lost twice that much. Tech shares were also pressured by revelations that China hacked the US supply chain by including tiny spy chips in motherboards used in servers.

US oil prices plunged near 3% on sharply higher domestic stockpiles, marking its biggest one-day drop in nearly two months. Gold often trades in sympathy with oil and a hedge against energy-related inflation.

The other precious metals were also lower, with silver sliding 0.8% while platinum and palladium lost 1.3% and 0.8%, respectively.

At the Comex close: December gold dipped $1.30 to $1,201.60; December silver slid 8 cents to $14.59; January platinum fell $11.20 to $824.50; and December palladium shed $8.50 to $1,045.50 an ounce.