Daily Gold Update

Source:Matt Warden, American Gold Exchange

AustinGold dipped 0.8% to close under $1953 to start the shortened Labor Day work week. Given the light number of US economic reports scheduled, metals will likely be disproportionately influenced by global economic data and an inordinate number of Federal Reserve speeches on the docket this week.

The dollar was buoyed today by a weaker than expected Chinese and European economic data, rising 0.6% against its major rivals. The August Caixin Chinese service sector survey showed the slowest expansion in 8 months, emphasizing concerns about the countries faltering post-lockdown recovery, while release of the latest Eurozone Composite PMI survey showed production in the region contracting at the fastest pace since Nov 2020. A stronger dollar pressures gold and other commodities by making them more expensive overseas.

Benchmark 10-year Treasury yields climbed 0.084 percentage points to 4.270% today. Rising yields weigh on gold by increasing the opportunity cost for holding it instead of bonds.

Thursday is packed with at least six speeches by regional Federal Reserve Presidents, the last speeches scheduled before the official Saturday blackout period begins before the next FOMC meeting on Sept 12th & 13th. Federal Reserve policy limits the extent to which FOMC participants and staff can speak publicly, beginning on the second Saturday preceding a Federal Open Market Committee (FOMC) meeting. Fed fund futures currently indicate a 93% chance of a pause — or no change in the Federal Funds Rate — at the September FOMC meeting. An indication of a more restrictive or looser policy stance during this week’s speeches could shift the odds going into the blackout period.

The other precious metals were lower, with silver sliding 0.7% while platinum and palladium dropped 3.6% and 1.1%, respectively.

At the Comex close: December gold dipped $14.50 to $1,952.60; December silver lost 67¢ to $23.87; October platinum plunged $35.20 to $933.50; December palladium lost $13.40 to settle at $1,214.00 an ounce.