Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold was nearly flat, edging down less than 0.1% to close just above $1,947, as yields and the dollar perked up on solid US data ahead of Jerome Powell's speech on Friday at the Jackson Hole global symposium The metal held almost all of yesterday's 1.2% rally to a three-week high.

First-time jobless claims fell by 10,000 last week to a three-week low of 230,000, signaling that the labor market continues to be surprisingly resilient.

Separately, core orders for durable goods, excluding transportation and defense spending, rose 0.1% in July. Core orders are considered a good proxy for broader business investment and manufacturing.

Benchmark 10-year Treasury yields rebounded back above 4.2% on the better data and expectations that Powell will tell his fellow central bankers that interest rates will remain high for longer to fight persistent inflation. Higher yields weigh on gold by increasing the opportunity cost for holding it instead of bonds.

The dollar tracked higher with yields, adding 0.5% against major rivals and pressuring gold and other commodities by making them pricier in other currencies.

Gold was backstopped by safe-haven inflows after all three major US equity indexes dropped sharply ahead of the Powell speech. The Dow and S&P 500 lost 1.1% and 1.4%, respectively, while the rate-sensitive Nasdaq dropped 1.9%.

While sharply higher yields in recent weeks have weighed on gold in the short term, they've also decreased the likelihood that the Fed will raise interest rates further, which will help gold in the longer term.

Two prominent Fed officials stated as much today. Philadelphia Fed President Patrick Harker and Boston Fed President Susan Collins said the higher bond yields will complement the Fed's actions to cool inflation. As a result, they noted, additional rates hike will probably not be needed.

The other precious metals were mixed. Silver slipped 0.7%; platinum rose 0.5%; and palladium dropped 2.9%.

At the Comex close: December gold dipped $1 to $1,947,10; September silver slid 16 cents to $24.23; October platinum picked up $4.80 to $943; and September palladium shed $36.80 to $1,244.60 an ounce.