Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold fell 1.1% to close under $1,950 despite a weaker dollar and disappointing economic data as traders continued to take profits from a series of all-time highs above $2,000. The metal posted a weekly decline of 3.9% after nine straight weeks of rising prices.

US retail sales rose 1.2% in July, less than forecast, after a rousing 8.4% rebound in June. The falloff was attributed to the resurgence of national COVID-19 infections and the reduction of Federal stimulus support for small businesses and laid off workers.

Separately, consumer sentiment edged up slightly but remained mired near pandemic lows, according to the University of Michigan survey, with most Americans believing that it will be years before the economy returns to normal. Consumer spending accounts for roughly 70% of GDP.

The dollar fell another 0.3% against major rivals as traders increasingly expect the US recovery to lag its peers. The buck fell for the eighth straight week, its longest run of weekly declines in 10 years.

Fueled in part by persistent dollar weakness, gold began the week posting new all-time highs near $2,040. The announcement of a possible vaccine by Russia midweek prompted a technical selloff of more than 4% as traders took the opportunity to cash out a portion of their winnings.

Rising wholesale and consumer inflation data also weighed on the gold price by triggering a rise in Treasury yields as investors dumped lower-yielding bonds to keep up with inflation.

In general, rising inflation is bullish for gold because investors seek the metal out as a long-term store of value. But sharply higher yields can create short-term headwinds by increasing the opportunity cost for holding gold, which supplies no yield itself.

The other precious metals also lower for the day and week. Silver fell 6.7% for a weekly decline of 5.3%. Platinum dropped 2.4% today and 1.2% this week. Palladium shed 3.3% for a weekly loss of 1.5%.

At the Comex close: December gold fell $20.60 to $1,949.80; September silver surrendered $1.63 to $26.09; October platinum dropped $23.90 to $959.10; and September palladium shed $73 to $2,143.80 an ounce.