Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold fell 1% to close under $1,710 as the dollar and bond yields jumped after solid US data bolstered expectations that the Fed will remain aggressive in raising interest rates. It was the metal's lowest finish in six weeks.

The ISM reported US factories expanded again in August, with the manufacturing index holding steady 52.8% for a second month. While much of the economy has slowed recently, manufacturing has continued to grow slightly, which bodes well for the general health of the economy.

First-time jobless claims tumbled last week to the lowest level in more than two months, signaling that any slowing of US economy is not triggering widespread layoffs.

On the downside, the BLS reported productivity in nonfarm businesses decrease 4.1% in Q2 while unit labor costs surged 10.2%, adding to inflation worries.

Suggesting solid residual strength in the economy, the upbeat data led traders to speculate that the Fed will be less inclined to ease its aggressive monetary tightening for fear of tipping the US into recession. Fed funds futures traders are pricing-in a 78% likelihood of a third-straight rate hike of 75 basis points later this month.

Benchmark 10-year Treasury yields jumped the nearly 3.3% on the hawkish rate view, pressuring gold by increasing the opportunity cost for holding it instead of bonds. In addition, the Fed will begin doubling its monthly balance-sheet reduction to $90 billion in September, further tightening the money supply and supporting yields.

The dollar surged 0.9%, reaching a new 20-year high against a basket of rivals. A stronger dollar weighs on gold and other commodities by making them pricier in other currencies.

The other precious metals were also sharply lower. Silver fell 1.2% while platinum lost 2.6% and palladium tumbled 4%.

At the Comex close: December gold fell $16.90 to $1,709.30; December silver shed 22 cents to $17.66, the lowest since June 2020; October platinum lost $21.50 to $805.50; and December palladium dumped $82.60 to $1,996.30 an ounce.