Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold rose 0.1% to close above $1,967 despite rising yields and a stronger dollar after another mixed batch of US data left investors awaiting clearer signs of the Fed's next move. The metal still gained 1.4% for the week.

The Labor Department reported the US economy added 187,000 jobs in August, more than consensus forecasts but still weaker than the trend earlier in the year. The unemployment rate rose from 3.5% to 3.8%, the highest level in 18 months, and July's total was revised down to 157,000 from the 187,000 initially reported. It was the fourth straight month of sub-200,000 job gains.

The pace of wage growth also slowed, rising a modest 0.2% in August. While the annual rate dipped to 4.3%, it remains well above the Fed's pre-pandemic target of 3%.

The ISM manufacturing index remained in contraction for the tenth straight month, with only five of 13 industries posting growth. But the index did creep slightly higher to 47.6, the highest level since February, where anything above 50 indicates growth.

Benchmark 10-year Treasury yields crept up after the payrolls data came in better than expected. Rising yields weigh on gold by increasing the opportunity cost for holding it instead of bonds.

Also supporting yields, Cleveland Federal Reserve President Loretta Mester told an ECB research group that "inflation remains too high" and suggested that another rate hike may be needed.

The dollar added 0.6% against major rivals, lifted by Mester's comments and relief that the payrolls data was not worse. A stronger dollar pressures gold and other commodities by making them more expensive overseas.

Gold still enjoyed a solid week, picking up 1.2% as yields and the dollar retreated on recent evidence of slowing growth and speculation that rate hikes might soon end. Fed fund futures trades now see a 93% chance of a pause at the September Fed meeting, up from 89% yesterday.

The other precious metals were mixed for the day and week. Silver slid 1% today but rose 1.4% this week. Platinum dropped 0.6% on the day but gained 2.2% for the week. Palladium picked up 0.7% today but inched down 0.1% this week.

At the Comex close: December gold gained $1.20 to $1,967.10; December silver lost a quarter to $24.56; October platinum dropped $5.70 to $968.70; December palladium picked up $8.70 to $1,227.40 an ounce.