Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.2% to close above $1,856 as rising oil prices and worries about growth lifted safe-haven demand despite higher yields and a stronger dollar.

The Organization for Economic Cooperation and Development cut its global growth forecast for 2022 from 4.5% down to 3%, citing the Ukraine invasions and Covid lockdowns in China as the main reasons. The dismal outlook comes one day after the World Bank slashed its forecast to 2.9%.

Adding to economic pressure, crude prices rallied another 2.5% to more than $122 per barrel after US inventories fell by 2 million barrels and Norwegian rig workers threatened to strike. Goldman Sachs warned today that prices could rise above $150 in coming months on supply chains issues and Russian embargoes.

Gold often trades in sympathy with oil as a hedge against energy-related inflation.

Capping gold’s gains, benchmark 10-year Treasury yields pushed back above 3% on growth and inflation concerns. And the dollar picked up 0.2%, tracking higher with yields and expectations for more aggressive rate hikes from the Fed.

Rising yields typically weigh on gold by increasing the opportunity cost for holding it instead of bonds. A stronger dollar makes gold and other commodities pricier in other currencies, limiting overseas demand.

The other precious metals were lower, with silver dropping 0.4% while platinum and palladium fell 0.1% and 1.4%, respectively.

At the Comex close: August gold added $4.40, to $1,856.50; July silver dropped 9 cents to $22.09; July platinum dipped $1.30 to $1011.60; and September palladium fell $27.60 to $1,937.80 an ounce.