AGE Daily Gold Update

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

10/4/2024: Gold eases on strong jobs report

Source: Dana Samuelson, American Gold Exchange

Austin — New York Spot gold eased lower 0.44% to close the New York session today at $2,645.80, after whipsawing first lower and then higher, following the release of today's stronger than anticipated non-farms payroll report. In the spot market gold traded as low as $2,632.67 and as high as $2,669.10 per ounce while silver hit a trading day low of $31.54 and a high of $32.94. Gold closed the week just $1.50 higher than last Friday’s close while silver gained 60 cents week on week, closing the New York session today at $32.12

According to the Bureau of Labor and Statistics, the US economy created 254,000 new jobs in September beating all analyst’s expectations. In addition to the better-than-expected new job creation, job gains for the months of July and August were revised higher by 55,000 and 17,000 jobs respectively, for a combined total upward revision of 72,000 more jobs than were previously reported. The unemployment rate fell slightly from 4.2% in August to 4.1% in September.

Federal Reserve Bank of Chicago President Austan Goolsbee praised today's report, indicating that the Fed's dual mandate of low inflation and full employment had reached the “freeze frame” sweet spot.

Both the dollar and U.S. Treasury yields surged following the release of the better-than-expected jobs report. Markets are now gaming that the Fed will be less aggressive in cutting the federal funds rate during their upcoming November and December meetings. Late in the trading session the dollar had gained 0.55% to 102.55 while the 10-Year US T-bill yield had increased 0.124 to 3.975%.

Middle east tension continued to grow with Israel continuing to hit Hezbollah targets in Lebanon, including a strike aimed at Hashim Safieddine, the heir-apparent to assassinated Hezbollah leader Hassan Nasrallah. In Iran, in a rare public speech, Iran’s Supreme Leader Ayatollah Ali Khamenei celebrated Nasrallah in Friday prayers and vowed retaliation if Israel struck Iran again. Israel has yet to retaliate for last weekend’s Iranian ICBM attack.

At the New York spot close: gold eased $11.30 to $2,645.80; silver dipped 6 cents to $32.12; platinum eased $3.40 to $989.80; and palladium edged down $2.10 to $998.50 an ounce.

10/3/2024: Gold edges higher as Middle East tension grows

Source: Dana Samuelson, American Gold Exchange

Austin — Gold edged higher in today’s New York session, gaining 0.37%, rebounding from yesterday’s profit taking as tension in the Middle East continued to slow boil. Israel increased its excursion into southern Lebanon and struck at Hezbollah targets in Beirut. Meanwhile the world waits to see the ways Israel may retaliate against Iran for last week’s Iranian ICBM attack on Israel. Oil punched 4.64% higher today as fears of Israeli strikes on Iranian oil facilities percolated up, helping to buoy safe-haven gold.

This ISM services index increased from 51.5 in August to 54.9 in September, indicating the services sector of the economy continued to expand for the 49th time in the last 52 months. Both the business activity and new orders expanded 6.6% and 6.4% from August while employment contracted 2.1%. Contrarily, yesterday’s September manufacturing PMI report was unchanged from August at 47.2% but remained in a contractionary phase for the 6th month in a row and for 22 out of the last 23 months. Inventories and prices both decreased 6.4% and 5.7% respectively, while new orders increased 5.0%, but were still technically in contraction at 49.8. A number below 50 indicates contraction while a number above 50 indicates expansion.

The dollar and the US 10-year US Treasury yields continued their firming trend following the release of the ISM services report this morning. The firming dollar and yields trend, which began after the Iranian ICBM strike on Israel last week, continued with international monies flowing into the US seeking haven in the dollar and US Treasuries. Both were modestly higher, with the dollar rising 0.23% to 101.91 on the DXY and the 10-year T-bill yield rising 0.057 to 3,845%. Higher yields typically weigh on gold by increasing the opportunity cost for holding it instead of bonds for safety. The growing conflict in the Middle East, however, is buoying all safe-haven assets today.

Markets around the globe are waiting for tomorrow’s BLS non-farms payroll report indicating how many new US jobs were created in September, as well as the direction and size of the revisions for both July and August. Analysts are anticipating approximately 147,000 new jobs to be announced by the BLS. Strength or weakness in the September and October non-farms payroll reports will be one of the key factors determining how aggressive the Fed becomes in their current rate cutting cycle going into their last two meetings this year, Nov. 6 - 7 and December 17 - 18.

At the New York spot close: gold gained $10.00 to $2,657.10; silver gained 56 cents to $32.19; platinum fell $11.20 to $993.20; and palladium dropped $18.10 to $1,000.60 an ounce.

10/2/2024: Gold slips on profit-taking

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold slid 0.8% to close at $2,647 on profit-taking from yesterday's 1.2% surge. Rises in Treasury yields and the dollar pressured the metal as investors await this week's nonfarm payrolls data and further developments in the Middle East. Silver slipped 0.6% to end at $31.63 an ounce.

ADP reported 143,000 jobs were added to private payrolls in September, beating median forecasts of 128,000. But it was the sixth straight month of employment gains under 200,000, indicating that the labor market is cooling.

Friday's release of the government's nonfarm payrolls report will give a better sense of the health of the job market.

Benchmark 10-ywear Treasury yields ticked up slightly from one-week lows on the ADP report and relief that Iran's bombardment of Israel has not provoked a wider war so far. Higher yields weigh on gold by increasing the opportunity cost for holding it instead of bonds for safety.

The dollar added another 0.4% against major rivals as Forex traders continued to seek it out as a safe-haven currency. A rising buck pressures gold and other commodities by making them more expensive overseas.

Bullion has gained 29% so far this year on monetary easing and global tensions.

Platinum and palladium added 1/6% and 2.4%, respectively.

At the New York spot close: gold slid $202.0 to $2,647.10; silver slipped 18 cents to $31.63; palladium added $16 to $1,004.40; and palladium rose $23.40 to $1,018.70 an ounce.

10/1/2024: Gold jumps on Middle East turmoil

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold jumped 1.2% to close above $2,667, near its all-time high, after Iran fired missiles into Israel, escalating global tensions and stoking demand for safe havens. Silver rose 31 cents to finish at $31.39 an ounce.

Iran attacked Israel with a barrage of ballistic missiles today in retaliation for series of strikes against Iran-back Hezbollah forces and leadership in Lebanon. The US assisted Israel in defending against the salvo, though the results were unclear.

Benchmark 10-year Treasury yields fell to the lowest levels in a week as the risk of a wider war drove investors into the perceived safety of US government debt. Falling yields boost gold by decreasing the opportunity cost for holding it instead of bonds.

Sharply higher oil prices also supported gold. US benchmark WTI crude jumped 3.5% on concerns that an Iran-Israel conflict could limit Middle East petroleum production. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

Limiting gold's gains, the dollar rose 0,.4% against major rials as global forex traders flocked to the currency for safety.

The Labor Department reported US jobs openings rose more than expected in August, hiring was weak and signaled a slowing labor market.

Platinum rose 1% while palladium slid 0.5%.

At the New York spot close: gold gained $31.20 to $2,667.30; silver added 28 cents, to $988.40; platinum picked up $9.40 to $988.40; and palladium slipped $4.90 to $995.30 an ounce.

9/30/2024: Gold has best quarter since 2020

Source: Bill Musgrave, American Gold Exchange

Austin — Consolidating its best quarter in four years, New York spot gold eased 0.3% to close above $2,626 as Treasury yields and the dollar edged up after Jerome Powell predicted a soft landing for the US economy. The metal gained 5.7% for the month to post an epic quarterly rise of 13.2%. Silver fell 1.1% to finish at $31.16 but still added 8.5% for the month and 6.6% for the quarter.

Speaking at the annual meeting of the National Association for Business Economics, Fed Chair Powell said the economy is "in solid shape," on track for a soft landing. Expecting inflation to cool further, Powell predicted two more rate cuts this year of 25 basis points each.

Meanwhile, the Chicago business-activity index, also known as the Chicago PMI, inched up in September but remained mired in contraction for the tenth straight month. The national ISM report later this week will give a better sense of US manufacturing health.

The dollar rose 0.4% against major rivals as traders weighed Powell's optimism and recalibrated their interest rate bets. Fed fund futures traders dropped the odds of a half-point cut in November to 35% from more than 53% last Friday. Benchmark 10-year Treasury yields rose slightly but held under 3.8%.

Gold surged to a series of all-time highs this month behind an aggressive pivot towards monetary easing by the Fed and escalating tensions in the Middle East. And more may be in store. Goldman Sachs today raised its forecast for gold to $2,900 an ounce by early next year.

Platinum fell 2.9% today and 2.3% this quarter. Palladium lost 2.3% today but rose 2.3% this quarter.

9/27/2024: Gold scores third weekly win

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold fell 1% to close near $2,620 despite falling inflation and downturns in Treasury yields and the dollar as traders took profits from the metal's seven-day rally, driven by aggressive Fed easing. Bullion still gained 1% for the week, its third straight weekly win, while hitting a series of new record highs above $2,600. Silver dropped 1.6% to finish at $31.52, rising 1.1% for the week.

The personal consumption expenditures index, the Fed's preferred inflation gauge, rose a scant 0.1% in August, while the 12-month inflation rate increased by just 2.2%, the lowest since April 2021. The core PCE, less food and energy, also rose 0.1%.

Meanwhile, August consumer spending increased by 0.2%, down from 0.5% in July, indicating that the main driver of the economy is slowing but not grinding to a halt. Consumer spending accounts for roughly 70% of GDP.

The weak data supports the Fed's decision last week to pivot sharply toward monetary easing by reducing interest rates by 50 basis points, the biggest rate cut in 16 years. It also opens the door to further rate cuts, perhaps of equal size, in coming months.

Fed fund futures markets are fully pricing a quarter-point rate cut at the Fed's November meeting, with the odds of another half-point cut rising to more than 54% after the data releases.

Lower interest rates are bullish for gold because they put downward pressure on Treasury yields, decreasing the opportunity cost for holding it instead of bonds for safety. And low rates weaken the dollar, making gold cheaper overseas.

Benchmark 10-year Treasury yields retreated on the inflation and spending data. Tracking with yield, the dollar fell 0.4% against major rivals.

Platinum slipped 0.3% but held a weekly rise of 2.7%. Palladium shed 2.6% today and 5% this week.

At the New York spot close: gold fell $25.60 to 2,644.30; silver slid 51 cents to $31.52; palladium dipped $2.90 to $1,008.50; and palladium lost $27.80 to $1,023.40 an ounce.

9/26/2024: Gold rises for seventh session

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold gained another 0.4% to close at a fresh all-time high near $2,670 despite upbeat US data as rate-cut momentum, a weaker #dollar, and safe-haven inflows pushed the rally to seven straight sessions. Silver jumped 1% to finish at $32.03 after hitting an intraday price of $32.53, the highest in 12 years.

The government confirmed the economy grew 3% in the second quarter, in line with previous reports, and appears to be set for similar growth in Q3. Consumer spending, which accounts for 70% of GDP, ticked down from 2.9% to 2.8%, while government spending rose to 3.1% from the 2.7% originally reported.

Durable-goods orders were flat in August, but this was considered good news, as economists had forecast a decline of 3%. The Fed's pivot toward lowering interest rates is expected to benefit manufacturing and business investment as the cost of money decreases.

First-time jobless claims sank to a four-month low of 218,000 last week suggesting that companies are resisting laying off workers despite a shortage of job openings.

Benchmark 10-year Treasury yields rose to a three-week high as the upbeat data kindled risk appetite, pulling money from bonds into equities. All three major US stock indexes rose 0.4% or more.

The dollar fell 0.4% against major rivals led by the Swiss franc and the Swiss National Bank cut interest rates by a quarter-point. A weaker dollar boosts gold and other commodities by making them cheaper in other currencies.

Gold continues to ride the Fed's dovish pivot to lower interest rates. Fed fund futures now see a full 200 basis points in cuts, including the 50 from last week, by next September.

In addition, the aggressive escalation in violence between Israel and Hezbollah, atop the conflicts in Gaza and Ukraine, are driving demand for the metal as a safe haven.

Platinum and palladium picked up 2% and 1.2%, respectively.

At the New York spot close: gold gained $10.70 to $2.669.09; silver rose 33 cents to $32.03; platinum climbed $19.70 to $1,011.40; and palladium added $12,80, to $1,051.20 an ounce.

9/25/2024: Gold gains on dovish rate view

Source: Bill Musgrave, American Gold Exchange

Austin — Rising for a sixth straight session, New York spot gold added another 0.3% to close above $2,659 as traders bet the Fed will deliver another jumbo rate cut to support the flagging job market. Bullion has now risen 29% so far this year. Silver fell 1.3% to end at $31.70 an ounce.

When the Fed delivered its first half-point rate cut in 16 years last week, Chairman Powell told reporters that his focus is pivoting from inflation to jobs. The size of the cut indicated the urgency of the pivot, and for good reason.

The labor market, while not exactly redlining, has weakened dramatically. Monthly job creation has fallen to the lowest level since 2019, excluding the pandemic. Job opening have plunged 37% since early 2022. The unemployment rate has jumped from 3.4% to 4.2% in 18 months. And the number of Americans on unemployment has risen to pre-pandemic levels.

The markets increasingly expect the central bank to ride to the rescue by delivering another oversized rate cut in November. Fed fund futures trading is pricing in odds of half-point reduction at 59%, up from 37% a week ago.

Falling interest rates are bullish for gold because they pressure bond yields, decreasing the opportunity cos for holding gold as a safe-haven asset. And lower rates typically weaken the dollar, making gold less expensive in other currencies.

Gold's gains today came despite a rebound in the dollar, which picked up 0.4% as the yuan weakened on concerns that China's easing program, announced yesterday, may be inadequate to lifting its ailing economy.

Platinum picked up 0.4% while palladium slid 2%.

At the New York spot close: gold gained $8 to $2,659.20; silver slipped 41 cents to $31.70; platinum added $4, to $991.70; and palladium shed $21.70 to $1,038.40 an ounce.

9/24/2024: Gold gains for fifth session

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold gained 0.9% to close at a new record above $2,651 after weak consumer data and last week's jumbo rate cut from the Fed pressured yields and the dollar, boosting alternatives stores of value. The metal has risen 2.5% over five straight winning sessions. Silver jumped 4.4% to finish at $32.11 an ounce.

US consumer confidence plunged in September by the most since 2021 as Americans fret about the cooling job market, softer overall business conditions, and their future incomes. The upcoming presidential election, which could hinge on views about who can best handle the economy, was also a concern. Consumer spending accounts for some 70% of GDP.

Benchmark 10-year Treasury yields retreated slightly after the confidence data, boosting gold by decreasing the opportunity cost for holding it instead of bonds for safety.

The dollar fell harder, losing 0.4% against major rivals led the yuan, which rallied sharply after China unveiled the biggest stimulus plan since the depth of the Covid pandemic. A weaker dollar lifts gold and other commodities by making them cheaper in other currencies.

The Fed's half-point rate cut and dovish outlook for future cuts continue to fuel inflows into gold.

Platinum and palladium rose on expected commodity-demand driven by China's stimulus program, adding 2.7% and 1.4%, respectively.

At the New York spot close: gold gained $24.70 to $2,651.20; silver surged $1.34 to $32.11; platinum picked up $25.90 to $987.70l and palladium advanced $15 to $1,060.10 an ounce.

9/23/2024: Gold extends Fed-induced rally

Source: Bill Musgrave, American Gold Exchange

Austin — Extending last week's 1.5% rally, New York spot gold added another 0.3% to close at a fresh record above $2,628 on momentum from the Fed's oversized rate cut, along with safe-haven inflows from escalating Middle East violence. Silver fell 1.3% to finish at $30.77 an ounce.

Pivoting from reducing inflation to supporting the labor market, the Fed cut interest rates by 50 basis points last week as it embarks on an aggressive pivot toward monetary easing. Fed fund futures put the odds of another half-point cut in November at almost 50/50 and project a total of 75 basis points in further cuts by December.

Several Fed officials voiced support of the size of the rate cut today. Both Chicago Fed President Austan Goolsbee and Atlanta Fed President Raphael Bostic said a half-point cut was warranted because inflation is down and the job market is cooling, yet the funds rate was far more restrictive than needed.

Lower interest rates are bullish for gold because they put downward pressure on Treasury yields, decreasing the opportunity cost for holding it instead of bonds for safety. And low rates weaken the dollar, making gold cheaper overseas.

Further supporting gold Israel and Hezbollah stepped up attacks on each other, threatening to escalate their conflict into a full-scale war.

Platinum and palladium fell 2% and 3.1%, respectively.

At the New York spot close: gold gained $8.40 to $2,628.30; silver slid 41 cents to $30.77; platinum shed $20.10 to $961.80; and palladium dropped $33 to $1,045.10 an ounce.