Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold added another 0.9% to close above $2,426 after weak US data and dovish signals from the Fed pressured Treasury yields and the dollar, lifting alternative assets. The metal rallied 4.2% in July for its best month since March. Silver climbed 1.4% to finish at $28.78 but still slid 1.5% for the month.

As expected, the Federal Reserve left interest rates unchanged at the close of its two-day meeting on monetary policy. But the Feds policy statement opened the door to a rate cut in September, dropping language about being highly sensitive to inflation risks and emphasizing its concerns about weakness in the labor market.

In his post-meeting press conference, Fed Chair Jerome Powell said explicitly that the Fed is watching labor market conditions quite closely, and that a rate cut is on the table for September if inflation continues trending lower.

As if on cue, ADP reported that private payrolls added just 122,000 new jobs in July, the fewest in six months. And the Labor Department said that US labor costs grew at the slowest pave in more than three years in Q2.

Benchmark 10-year Treasury yields tumbled to a four-month low near 4% on the increasingly dovish rate view. Lower yields boost gold by decreasing the opportunity cost for holding it instead of bonds for safety.

Tracking lower with yield, the dollar dropped 0.5% against major rivals as the yen jumped on a surprise rate increase from the Bank of Japan, which is trying to normalize decades of ultra-loose moentary policy. A weaker dollar supports gold and other commodities by making them cheaper in other currencies.

Gold also received safe-haven bids after an important Hamas leader was assassinated in Iran, prompting new threats of vengeance on Israel, escalating tensions in the war-torn region.

Platinum added 1.7% today but fell 1.5% this month. Palladium jumped 4.9% but still lost 5% in July.

At the New York spot close: gold gained $21.50 to $2,426.50; silver rose 41 cents to $28.78; platinum picked up $16.30 to $986.40; and palladium surged $43.50 to $925.20 an ounce.