Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold jumped 1.3% to close above $2,427 on expectations of large rate cuts from the Fed and safe-haven inflows from escalating turmoil in the Middle East. The gains came despite upticks in Treasury yields and dollar, which typically weigh on the metal. Silver surged 2.5% to finish at $27.63 an ounce.

Following last Fridays remarkably weak July payrolls report, in which the economy added only 114,000 jobs and the unemployment rate rose to 4.3%, the markets are increasingly betting on a sharp pivot from the Fed at its September meeting.

Fed fund futures trading puts the odds of a half-point rate cut at 73%, up from 70% yesterday, with more than a full 1% in total cuts by December. Wells, Fargo, JP Morgan, and Citigroup are all forecasting a half-point cut in September.

Lower interest rates are bullish for gold because they reduce the opportunity cost for holding it instead of bonds for safety, and they make commodities like gold and silver cheaper in other currencies, boosting overseas demand.

Benchmark 10-year Treasury yields touched 4% after initial US jobless claims fell by 17,000 last week, signaling some residual strength in the labor market. The dollar also edged up slightly.

Gold is also getting a lift from global flights to safety after the recent killings of senior Hamas and Hezbollah leaders, prompting vows of retaliation against Israel.

Platinum and palladium added 1.1% and 2.5%, respectively.

At the New York spot close: gold jumped $31.70 to $2,427.30; silver surged 74 cents to $27.63; platinum picked up $10.20 to $939.80; and palladium rose $22.10 to $980.40 an ounce.