Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold dipped 0.1% to close under $1,839 as a rebound in equities and an uptick in Treasury yields weighed on safe-havens assets.

After posting its worst week since 2020, Wall Street jumped higher as bargain-hunters returned to the market after the three-day weekend. Mega-cap growth and energy companies, hit hardest by last week’s selloff, led the way.

The risk rally came despite downbeat forecasts from prominent investment banks. Goldman Sachs said the US economy now has a 30% likelihood of falling into recession next year, up from 15% at its last forecast, and a 48% chance within two years. Morgan Stanley now puts the odds at 35% within the next 12 months.

Separately, economist Larry Summers warned yesterday that a recession destroying 10 million jobs will be required to get inflation under control. The former Treasury Secretary and current Harvard President was widely ignored last year when he warned that President Biden’s $1.9 trillion stimulus plan would lead to elevated inflation.

Benchmark 10-year Treasury yields pushed back over 3.3% as traders shifted toward risk assets, pressuring gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Backstopping gold’s slide, the dollar lost 0.3% against major rivals led by the euro, which rallied after ECB officials affirmed plans to raise interest rates. A weaker dollar typically supports gold and other commodities by making the less expensive overseas.

The other precious metals were higher, with silver adding 0.8% while platinum and palladium rose 1% and 3.6%, respectively.

At the Comex close: August gold dipped $1.80 to $1,838.80; July silver added 18 cents, to $21.77; July platinum rose $9.30 to $939.50; and September palladium climbed $64 to $1,862.70 per ounce.