Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold dipped 0.3% to close under $1,810 as new concerns about Covid sparked rallies in bonds and the dollar, undercutting demand for alternative stores of value.

With the aggressive Delta variant causing a surge of infections and deaths both at home and abroad, investors are increasingly worried about prospects for the global recovery. US infections are up 43% in the past week with the vasty majority occurring among the unvaccinated.

Wall Street sold off, with the Dow and Global Dow both dropping 2.5% while the S&P 500 and Nasdaq lost 2% and 1.5%, respectively. Benchmark 10-year Treasury yields plunged under 1.2%, the lowest since February, as traders piled into government bonds.

The dollar picked up 0.2% to hit a three-month high against major rivals, also on flights to safety.

While falling Treasury yields support gold by decreasing the opportunity cost for holding it instead of bonds, a rising dollar weighs on gold by making it more expensive overseas. Today, the pressure from the rising buck outweighed the support from safe-haven demand and falling yields.

Plunging oil prices also undercut gold. WTI crude tumbled nearly 8.5%, its biggest one-day drop since September, after OPEC+ agreed to boost output despite a cloudy outlook for demand because of the Delta variant. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were also lower, with silver falling 2.5% while platinum and palladium lost 3.4% and 1.7%, respectively.

At the Comex close: August gold dipped $5.80 to $1,809.20; September silver shed 65 cents to $25.14; October platinum fell $37.10 to $1,071.40; and September palladium lost $44.60 to $2,592.70 an ounce.