Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold surged another 1.7% to close above $1,730 as weak US data and slowing global growth pressured bond yields and the dollar, lifting alternative assets. The metal has jumped 3.5% over the past two sessions to finish at a three-week high.

Factory orders were flat in August, the Commerce Department reported today, while durable goods order fell 0.2%, signaling a slowdown in the sector that led the US economy out of the pandemic. The data reinforced yesterday's ISM report that manufacturing shrank to barely above contraction.

The red-hot labor market appears to be cooling quickly. Job openings fell sharply In August to a 13-month low while layoffs leapt to an 18-month high. The retreat in job openings was the fourth in the last five months as the economy began to sputter under the combined effects of high inflation and much higher interest rates.

US home price fell in August for the fourth straight month as the crucial housing market falters under rapidly climbing mortgage rates.

The soft data combined to drive benchmark 10-year Treasury yields back down near 3.6% as traders speculate that the Fed will become less aggressive with rate hikes as the economy slows to a crawl. Lower yields buoy gold by decreasing the opportunity cost for holding it instead of bonds.

A dovish pivot from a major central bank also pressured yields. Australia raised rates by 25 basis points, half of expectations, warning that a deteriorating global outlook, falling home prices, strained domestic budgets, and souring consumer confidence warrant a softer touch. The US, facing similar headwinds, may well opt for the same in coming months.

Tracking lower with yields, the dollar plunged another 1.2% against major rivals, lifting gold and other commodities by making them less expensive in other currencies.

And oil rallied another 3.1% to more than $86 per barrel on the weaker dollar and expectations that OPEC+ will announce substantial production cuts at its upcoming meeting. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were also strongly higher, with silver rising 2.5% while platinum and palladium rose 3.7% and 4.4%, respectively.

At the Comex close: December gold gained $28.50 to $1,730.50; December silver rose 51 cents to $21.10; January platinum picked up $33.60 to $933.70; and December palladium advanced $98 to $2,330.20 an ounce.