Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold inched up 60 cents to close just under $1,800 as stocks, yields, and the dollar all retreated despite a spate of solid US economic data, lifting demand for alternative assets.

Consumer confidence rose to the highest level since before the pandemic, beating expectations despite the aggressive spread of the delta variant of the coronavirus. Stimulus spending by the government, increasing vaccinations, and the near-total reopening of the economy have all stoke optimism for better times ahead.

Orders for durable goods climbed another 0.8% last month even though manufacturers struggled with shortages of supplies and workers. Omitting cars and planes, orders rose a modest 0.3%.

Factory activity in the mid-Atlantic Fed region gathered momentum in July, with the index and employment both climbing more than forecast.

Despite the robust economic reports, Wall Street fell from record highs as bloated valuations, weak earnings expectations for tech giants, and growing concern about US-China relations drove investors to take money off the table.

The Dow and S&P 500 lost 0.4% and 0.6%, respectively, while tech-heavy Nasdaq tumbled 1.4% for its worst day in two months.

Benchmark 10-year Treasury yields pulled back to 1.24% as trader shifted toward safety. Lower yields support gold by reducing the opportunity cost for holding it instead of banks as a safe-haven asset.

The dollar slid 0.3% against major rivals in anticipation of the Fed's policy statement tomorrow at the conclusion of its two-day meeting. A falling dollar tends to lift gold by making it cheaper overseas.

The buck surged to more than a three-month high in recent weeks, largely on expectations that the central banks will begin removing stimulus because of spiking inflation. The dramatic spread of the delta variant at home and abroad has shifted this calculus, to the dismay of dollar bulls, prompting analysts to expect a somewhat more dovish message tomorrow.

The other precious metals were lower, with silver falling 2.6% while platinum and palladium lost 1.9% and 2.7%, respectively.

At the Comex close: August gold added 60 cents to $1,799.80; September silver dropped 67 cents to $24.65; October platinum slid $20.50 to $1,049.50; and September palladium lost $71.40 to $2,606.70 an ounce.