Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold dipped 0.2% to close under $1,298 despite a weaker dollar as easing Eurozone tensions boosted risk appetite, pressuring safe-haven assets.

After three months of fraught negotiations, Italy established a new coalition government of the populist 5-Star Movement and the right-wing League Party. While the development emboldened euroskeptics in the EU, it also prevented a snap election this summer that would have become a referendum on whether Italy should remain in the Eurozone.

Global stocks rallied as euro-tensions eased, with the Dow and Global Dow both adding 0.7%. US Treasurys also sold-off with returning risk appetite, pushing 10-year Treasury yields back up to just under 3%.

Rising trade-war worries limited the rally in equities, however, after trade talks broke down between the US and China over the US imposition of tariffs on steel and aluminum. In addition, finance ministers from the Group of 7 issued a joint rebuke to the Trump Administration for imposing tariffs on its major allies.

The dollar slid 0.2%, backstopping gold's losses, as the euro rebounded and traders reacted to rising trade-war worries. Analysts are concerned that rising protectionism may hasten the demise of the dollar as global reserve currency, weakening its position in the foreign exchange marketplace. A falling dollar typically supports gold and other commodities by making them less expensive in other currencies.

Gold was further pressured by a 1.4% loss in oil prices after OPEC suggested that it may revise the current cap on production. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were also lower, with silver edging down less than 0.1% while platinum and palladium lost 0.4% and 0.2%, respectively.

At the Comex close: August gold dipped $2 to $1,297.30; July silver dropped a penny to $16.43; July platinum lost $3.20 to $903.50; and September palladium $2.30 to $994.30 an ounce.