AGE Daily Gold Update

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

7/19/2024: Gold tumbles on profit-taking

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold tumbled 2.3% to close under $2,396 as Treasury yields and the dollar rebounded for a second session, prompting traders to take profits. The metal ended the week down 0.8%. Silver dropped 3% to finish at $29.09, notching a weekly loss of 5.8%.

With no significant economic data released today, profit-taking took control of the markets, pushing investors into cash while stocks, bonds and gold sold off after rallying sharply this week.

With last Fridays unexpectedly soft CPI capping three straight months of falling consumer inflation and weaker economic data, a litany of dovish comments followed from Fed officials including Fed Chair Powell, cementing expectations the Fed will begin a series of rate cuts in September.

Fed fund futures traders see a 98% chance of at least a quarter-point cut in September, followed by a series of further cuts in the ensuing months as the Fed tries to engineer a soft landing for the economy while continuing to smother inflation.

Stocks and bonds rallied on the easing prospects while gold rocketed 3.8% higher early in the week, closing at a new all-time above $2,462 on Wednesday. Todays largely unmotivated retractions signaled that the markets got ahead of themselves, with exuberance causing over-bought positions ripe for taking profits despite bullish fundamentals.

All three major equity indexes retreated around 0.8% while Benchmark 10-year Treasury yields, which move inversely to bond prices and therefore bond demand, rebounded above 4.2%. Higher yields pressure gold by increasing the opportunity cost for holding it instead of bonds.

The dollar added 0.2% for the day and week, snapping a two-week losing streak as traders went to cash. A stronger dollar weighs on gold and other commodities by making them pricier in other currencies.

Platinum slid 1.2% today and 3.9% this week. Palladium shed 2.9% for a weekly decline of 7.2%.

At the New York spot close: gold fell %56.30 to $2,395.50; silver slid 91 cents to $29.09; platinum dropped $12.20 to $966.20; and palladium shed $26.90 to $902.30 an ounce.