Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinExtending Friday's 1.5% jump, gold rallied another 0.7% to close just under $1,790 after geopolitical turmoil and weak economic data in the US China and spurred demand for safe havens.

New York's Empire State index of business conditions plummeted to 18.3 in August from 43 in July as supply bottlenecks and the rapid spread of the Delta variant created headwinds for manufacturing and orders. Economists were expecting a decline from July's record reading but not a complete retracement.

The downbeat data follows Friday's report from the University of Michigan showed consumer sentiment at the lowest level in a decade because of the Delta variant and rising inflation.

Economic activity in China slowed sharply in July, with industrial output, retail sales, and fixed asset investment all weaker than forecast in the wake of the pandemic 's resurgence. And the political situation in Afghanistan deteriorated drastically over the weekend, with the Taliban retaking Kabul.

The combination weaker data and geopolitical unrest undercut optimism about global growth, driving US Treasury prices higher and yields lower. Benchmark 10-year yields fell as low as 1.24%, supporting gold by decreasing the opportunity cost of holding it instead of bonds as a safe-haven asset.

Stemming gold's gains, the dollar edged up 0.1% as Forex traders shifted toward the perceived safety of the US currency. A rising dollar creates headwinds for gold and other commodities by making them more expensive overseas.

The other precious metals were lower, with platinum and palladium dropping 0.5% and 2.2%, respectively, while silver was nearly flat, down less than 0.1%.

At the Comex close: December gold rallied $11.60 to $1,789.80; September silver added one cent, to $23.79; October platinum dropped $4.90 to $1,021.10; and September palladium fell $58.50 to $2,598 an ounce.