Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained another 0.7% to close above $1,995 as yields and the dollar receded on soft data and the passage of the debt-ceiling deal in the House, lifting alternative stores of value. Notching its third straight day of gains, the metal traded above $2,000 earlier in the session before slipping back on profit-taking.

The House overwhelmingly passed a bill to extend the debt ceiling and prevent a potentially catastrophic default. The deal, hammered out by President Biden and Speaker McCarthy over the holiday week, garnered bipartisan support.

US manufacturing fell again in May, with the ISM survey sliding under 47, where any reading under 50 signifies contraction. It was the seventh straight month in the negative, the longest streak since 2008-2009, during the depths of the Great Recession.

Separately, first-time jobless claims rose to a one-month high of 232,000 last week, although no major layoffs were recorded. Continuing claims rose 6,000 to 1.8 million, suggesting it is taking longer for people who are looking to find employment.

In good news for jobs, ADP said private payrolls added 278,000 new jobs in May, far more than forecast. Friday's nonfarm payrolls report will give a more reliable, and often quite different, profile of the current state of the labor market.

Benchmark 10-year Treasury yields fell to just above 3.6% on relief about the debt-ceiling and growing expectations that the Fed will not raise interest rate this month because of the weakening trend in data. Lower yields support gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar tracked lower with yields, dropping 0.7% against major rivals. A weaker dollar lifts gold and other commodities by making them less expensive in other currencies.

The other precious metals were also higher, with silver rising 1.7% while platinum and palladium picked up 1.1% and 2,3%, respectively.

At the Comex close: August gold gained $13.40 to $1,995.50; July silver climbed 40 cents to $23.99; July platinum added $11.10, to $1,010.10; and September palladium picked up $31.70 to $1,390.70 an ounce.