AGE Daily Gold Update

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

7/10/2024: Gold climbs again on rate view

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold climbed 0.5% to close above $2,372 as Treasury yields and the dollar ticked lower after Fed Chair Jerome Powell's second day of testimony on monetary policy raised hopes for rate cuts. Silver was virtually flat, edging up one cent to $30.73 an ounce.

Appearing before the House Financial Services Committee, Powell echoed his cautious comments to Senators on Tuesday, acknowledging a cooling labor market and falling inflation while emphasizing the need for more data.

But he also said the Fed would not wait for inflation to return to 2% before cutting rates, and would not be bound by the political calendar, suggesting that the first reduction could come before the election in November.

Tomorrow's release of the June consumer price index could deliver precisely the kind of data Powell seeks. Prices are projected to have risen just 0.1%, bringing the annual rate down to 3.1% from 3.3% in May.

Fed fund futures traders responded to what they heard as dovish hints, keeping the odds of a September rate cut at 76% with a second one likely in December.

Benchmark 10-year Treasury yields edged lower on the rate view, supporting gold by decreasing the opportunity cost for holding it instead of bonds. The dollar dipped 0.1%, making gold and other commodities cheaper in other currencies.

Higher oil prices also helped the metal as WTI crude rose 1.2% to $82.40 a barrel after US data showed declining crude inventories for a second week. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

Platinum and palladium added 0.7% and 0.4%, respectively.

At the New York spot close: gold gained $12.10 to $2,372.20; silver picked up a penny to $30.73; platinum added $7.20, to $999.40; and palladium advanced $5.40 to $991.60 an ounce.