Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold edged up less than 0.1% to close near $1,931 after weak US manufacturing data and a deeply inverted yield curve rekindled worries that the Fed could nudge the economy into recession.

The ISM manufacturing survey fell to 46% in June, the lowest reading since the depths of Covid lockdowns in May 2020, as soft demand and high interest rates continued to weigh on the sector. It was the eighth consecutive month of contraction.

Benchmark 10-year Treasury yields rose despite the down industrial data, capping gold's gains by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset. The dollar was virtually unchanged.

Meanwhile, the spread between 2-year and 10-year Treasury yields hit its deepest inversion since 1981, reflecting worries in the financial markets that the Federal Reserve will over-tighten monetary policy and create a recession. An inverted 2/10-year yield curve has preceded by six to 24 months every recession since 1955 except one, according to San Francisco Fed research.

The other precious metals were also higher, with silver and platinum adding 0.3% each while palladium picked up 0.4%.

At the Comex close: August gold rose $1.40 to $1,930.80; September silver climbed 8 cents to $23.09; October platinum picked up $2.50 to $915.70; and September palladium advanced $5 to $1,226 an ounce.