Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold was firm for a second session, edging down less than 0.1% to close near $1,949 as moderating consumer prices and escalating jobless claims kept yields and the dollar largely in check. The rose above $1,963 earlier in the session before eroding on profit-taking.

The consumer price index rose a gentle 0.2% in July, while the 12-month rate crept up to 3.2% from 3% in June, a two-year low. The core CPI, excluding volatile food and energy costs, also rose 0.2%. The 12-month core rate dipped to 4.7%, the lowest level in two years.

While headline CPI ticked up, the slight decrease in core CPI reinforces the overall downtrend in prices over the past year and increases the odds that the Fed will pause rate hikes in September. Fed fund futures trading now sees a 91% likelihood of no change in rates, up from 86% prior to the CPI release.

Adding to dovish expectations for September, initial jobless claims spiked by 21,000 last week to 248,000, the highest level in a month. While new claims remain well below the late spring peak, the second straight week of increases adds to evidence of cooling in the labor market.

After initially falling on the inflation data, Benchmark 10-year Treasury yields inched back up over 4%, pressuring gold by increasing opportunity cost for holding it instead of bonds as a safe-haven asset.

Tracking with yields, the dollar first fell then recovered to add 0.1% against major rivals. A stronger buck weighs on gold by making it pricier overseas.

The other precious metals were higher, with silver adding 0.4% while platinum and palladium gained 2.5% and 6%, respectively.

At the Comex close: December gold dipped $1.70 to $1,948.90; September silver gained 9 cents to $22.82; October platinum climbed $22.10 to $914.80; and September palladium advanced $74% to $1,305.50 an ounce.