Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.7% to close above $1,761 after weak US data pressured bond yields and the dollar, lifting alternative stores of value. It was the metal's first winning session in seven.

A pair of prominent economic indexes showed the US economy slowing substantially in August. The S&P flash PMI for service businesses, which comprise two-thirds of the economy, fell for the fifth straight month to the weakest reading since May 2020. The US manufacturing index dropped to the lowest level in more than two years.

And the crucial US housing market softened further, with new home sales plunging 12.6% in July to the lowest level since January 2016.

Separately, the eurozone composite PMI index contracted further to a 26-month low. The weakness was centered around the workhorse German economy, biggest in the region, which experienced the biggest decline in output since June 2020.

Benchmark 10-year Treasury yields pulled back under 2.9% on safe-haven inflows into bonds and growing speculation that the Fed may moderate its aggressive monetary tightening in September to forestall a recession. Lower yields help gold by decreasing the opportunity cost for holding it instead of bonds.

The dollar fell 0.4% on the shifting rate view, retreating from the highest level against the euro in 20 years. A weaker dollar buoys gold and other commodities by making them less expensive in other currencies.

Also supporting gold's rise, US benchmark WTI crude oil jumped 3.7% to more than $93 per barrel after Saudi Arabia floated the possibility of production cuts to underpin prices. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were mostly higher, with silver and platinum rising 0.8% and 1%, respectively, while palladium dropped 0.5%.

At the Comex close: December gold gained $12.80 to $1,761.20; September silver added 15 cents, to $19.03; October platinum climbed $8.40 to $876.40; and September palladium lost $8.90 to $1,972.90 an ounce.