Daily Gold Update

Source:Matt Warden, American Gold Exchange

Austin— Today�s Employment Situation Summary showed total nonfarm payroll employment increased by 209,000 jobs in July, well above consensus estimates of 178,000 new jobs. The US Dollar Index (DXY) surged off its 15-week lows by 0.84%, to 93.5, on the news, while precious metals prices retreated from their nearly 2-month highs, as gold adjusted down by $11.00, or 0.86%, to $1264.30 and silver declined 45 cents, or 2.6%, to $16.25 per ounce.

Also in today�s jobs report, last month�s year-over-year wage growth was a lackluster 2.5%, declining from the 3% to 4% range seen in 2016 and early 2017. Wage growth is a key component in inflation measures; with inflation indicators remaining below the 2% target set by the Federal Reserve, today�s decelerating wage growth reading reduced expectations the Fed will raise interest rates in December from the likelihood of 48% to 42.5%, according to the CME�s FedWatch Tool, which uses Fed Fund futures contracts to calculate the odds of Federal Open Market Committee (FOMC) meeting interest rate policy outcomes.

Precious metals often move inversely to the dollar as stronger dollar prices tend to reduce demand for metals overseas as it makes them more expensive. Precious metals and the dollar are sensitive to interest rate policy, with low interest rates bolstering precious metals demand by reducing the opportunity-cost of holding nonyielding precious metals rather than other interest-bearing assets.

At the Comex close: December gold fell $11.00 to $1,264.30; September silver dropped 45 cents to $16.25; October platinum rose $2.40 to $968.10; and September palladium fell $7.45 to $875.90 an ounce.