Daily Gold Update

Source:Matt Warden, American Gold Exchange

AustinGold tacked on another 0.8% today to close over $1727, pushing further above the $1700 psychological support it was flirting with earlier in the week. After testing a 15-month low of $1676 in overnight trade on Wednesday, gold ended a rather volatile week firmly higher, settling up 1% on the week, and breaking a 5-week down trend in the process.

The Dollar index slipped 0.3% today and 1.1% this week after reaching a generational high last week. The US dollar briefly moved above parity with the Euro for first time in 20 years last week but has been under selling pressure ahead of the European Central Banks meeting which occurred yesterday. In yesterday’s meeting the ECB raised their benchmark lending rate for the first time in 11 years 50 basis points, twice the anticipated quarter point rate hike. This brings the effective ECB lending rate back up to 0%, the first time their key lending rate has not been negative since 2014. Gold, which tends to move inversely to the dollar, rebounded off of cyclical lows, buoyed by the declining value of the dollar this week.

Focus now turns to the Federal Reserve’s FOMC meeting next week on Wednesday, July 27, where a 75 basis points hike in the benchmark US interest rate is widely expected to be announced. Second quarter GDP estimates will be released on Thursday, currently forecast at -1.6%. If US second quarter GDP is indeed negative, this will be the second consecutive quarter of negative economic growth in the US, which technically puts the US economy into recession. June’s PCE inflation reading will be released on Friday and is currently forecast at 0.6% month-over-month.

The other precious metals were mixed for the day and week. Silver slid 0.5% today and was down 1.2% this week. Platinum added 1% today and picked up 1.3% this week. Palladium jumped 7.5% for the session today and gained an oversized 9.2% for the week.

At the Comex close: Aug gold added $14.00 to $1,727.40; September silver dropped 10 cents to $18.62; October platinum increased $8.50 to $867.20; and September palladium added $142.10 to close at $2,018.80 an ounce.