Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold fell 1.5% to close under $1,979 after relatively solid US jobs and manufacturing data lifted yields and the dollar, causing traders to take profits from the metal's strong July. Gold gained 2.2% last month for its best monthly showing since March.

US job openings dipped slightly in July but remained at elevated levels, indicating the labor market remains extremely strong. Workers tend to quit their jobs when the economy is robust and the labor market is tight. The Fed is trying, with limited success, to lower job openings and slow the economy via rate hikes.

The ISM reported the manufacturing sector improved in July but remains mired in a slump. The index came in a 46.4%, slightly higher than in June, signaling that America factories are stabilizing if not expanding.

Global factories cannot say the same thing. The S&P Global manufacturing gauge matched the lowest level since June 2020, during the depths of pandemic shutdowns. Eurozone manufacturing contracted at the fastest pace Covid. And China's manufacturing PMI dropped into contraction last month at 49.2.

Benchmark 10-year Treasury yields jumped back above 4% as traders weighed the possibly that residual strength in the US economy might mean more rate hikes from Fed. Higher yields are a headwind for gold because they increase the opportunity cost for holding it instead of bonds as a safe-haven asset.

Tracking higher with yields, the dollar rose 0.5% to a two-week high against major rivals. A stronger dollar weighs on gold and other commodities by making them more expensive in other currencies, limiting overseas demand.

The other precious metals were also sharply lower, with silver falling 2.6% while platinum lost 1.9% and palladium shed 3%.

At the Comex close: December gold dropped $30.40 to $1,978.80; September silver shed 65 cents to $24.33; October platinum futures lost $18.20 to 940.40; and September palladium declined by $38.50 to $1,237.10 an ounce.