AGE Daily Gold Update

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

7/12/2024: Gold consolidates strong week

Source: Bill Musgrave, American Gold Exchange

Austin — Consolidating yesterdays 1.8% surge, New York spot gold inched down $1 to finish at $2,414 as cooling inflation and softer US economic data cemented rate-cut expectations, stoking risk appetite at the expense of safe havens. The metal gained 1.1% for the week, its second straight weekly rise. Silver fell 1.6% for the day and week, closing at $30.89 an ounce.

The producer price index measuring wholesale inflation rose 0.2% in June, slightly more than 0.1% forecast, bringing the 12-month rate up to 2.6%. The core PPI, less volatile food and energy, was flat in June, pulling the 12-month rate down to 3.1% from 3.3% in May.

Following yesterdays CPI data showing consumer inflation falling for the first time in four years, the modest PPI reinforced the view that disinflation is back after a reversal during the first quarter of the year.

All three major US equity indexes jumped 1%, with the Dow and SandP 500 hitting new all-time highs as investors grow increasingly convinced that the Fed will almost certainly begin cutting rates in September, if not before.

Weak consumer sentiment data contributed to the rate-cut narrative. The University of Michigan survey said sentiment fell to an eight-month low in July, the fourth decline in a row and the softest reading since November.

Fed fund futures traders now see a 94% likelihood of at least a quarter-point cut in September, with a second cut expected by December.

Benchmark 10-year Treasury yields retreated slightly, buoying gold by decreasing the opportunity cost for holding it instead of bonds. The dollar dropped another 0.4% against major rivals, supporting gold by making it cheaper overseas.

Platinum slipped 0.1% today for a weekly loss of 3.4%. Palladium fell 2.5% for the session and 6.5% for the week.

At the New York spot close: gold dipped $1 to $2,414; silver slid 51 cents to $30.89; platinum edged down $1.30 to $1,005.70; and palladium retreated $24.70 to $972.30 an ounce.