Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold edged up slightly to close at $1,814.50 in choppy trade after mixed data and comments from a prominent Fed member boosted the dollar, undercutting demand for alternative stores of value.

ADP reported that private payrolls increased by just 330,000 in July, roughly half of most forecasts. The weak print indicates job growth continues to struggle amid the pandemic resurgence due to the aggressive Delta variant of the coronavirus. The more definitive federal nonfarm payrolls report is due Friday.

On the positive side of the ledger, the ISM services index rose to a record 64.1% last month, with anything above 50% signaling expansion. As the economy reopened fully, Americans are flooding theme parks, hotels, restaurants, and other services-related companies. But the delta variant is casting a pall over similar growth going forward as new mandates and labor shortages are crimping business.

Gold surged 1% to more than $1,835 in intraday trading on the soft jobs data, only to retrace those gains after the stellar ISM report raised speculation that it may encourage the Fed to tighten monetary policy sooner than expected.

Fed Vice Chair Richard Clarida added to the hawkish sentiment, saying he expects gains in the labor market this fall will support a gradual reduction in quantitative easing. He also suggested that interest rates could begin to rise in early 2023.

The dollar bounced from early-session losses to a gain of 0.2% after the ISM report and Clarida comments. Higher rates support the dollar by making it more attractive to Forex trades seeking seek. A stronger dollar, in turn, pressures gold by making it pricier in other currencies.

The other precious metals were mixed, with silver and platinum sliding 0.5% and 2.4%, respectively, while palladium rose 0.2%.

At the Comex close: December gold added 40 cents, to $1,814.50; September silver lost 12 cents to $25.46; October platinum dropped $25.60 to $1,021.30; and September palladium gained $6.40 to $2,651.70 an ounce.