Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold dipped 0.1% to close under $1,215 as the new US-Mexico trade deal stoked risk appetite, boosting global stocks and reducing demand for safe-haven assets.

Announced yesterday, a new trade agreement between the US and Mexico has bolstered investor confidence, pushing the S&P 500 and Nasdaq into record territory and the Dow to a multi-month high. While still requiring Canada's sign-off to fully replace NAFTA, the accord removes a layer of risk that a North American trade war will damage the economy and curtail Wall Street's record-long bull market.

The dollar slid 0.2% against major rivals as traders continued to unwind safe-haven currency plays that favored it during recent trade tensions. Gold's slide was backstopped by the weaker buck, which typically supports commodities priced in it for global trade by making them less expensive overseas.

Risk appetite was further encouraged by data showing consumer confidence hit an 18-year high this month behind low unemployment and solid economic growth.

On the negative side of the ledger, the US trade gap widened 6.3% in July to a five-month high despite efforts by the Trump administration to limit it through tariffs. Exports fell for a second month while imports rose across the board. Separately, home sales fell again in July, signaling that the housing market may be flagging under the twin pressures of rising mortgage rates and higher prices.

Moody's Analytics published a report warning that the so-called leveraged loan market for corporate debt, now standing at $1.4 trillion, looks increasingly like the subprime mortgage market that led to the 2008 financial crisis. With loose underwriting standards making them easy to get, these loans carry floating rates that can quickly become unaffordable when interest rates rise, pushing borrowers into default. And like those subprime mortgages, they been packaged into collateralized loan obligations (CBOs) and sold to main-stream investors. When combined with corporate "junk" bonds, the market for this higher-risk corporate debt is around $2.7 trillion, just shy of the $3 trillion in subprime debt before the crisis.

The other precious metals were also lower, with silver sliding 0.6% while platinum and palladium lost 1.1% and 0.3%, respectively.

At the Comex close: December gold dipped $1.60 to $1,214.40; September silver dropped 9 cents to $14.77; October platinum fell $8.90 to $795.30; and September palladium slid $2.50 to $939.40 an ounce.