Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold dropped 0.4% to close under $1945 as yesterday’s trend remained in place. With little US data on the economic schedule this week, gold was mostly range bound while market participants wait for potential insights into the Federal Reserve’s plans, with multiple Fed President speeches scheduled this week ahead of the midmonth FOMC meeting.

The dollar edged higher today after the August US ISM service report showed economic activity expanded for the eight consecutive month, rising 0.02%. The better-than-expected reading slightly increased the odds of additional rate hikes by the Federal Reserve, with Fed funds futures now indicating a 91% chance of a rate pause at the upcoming Sept 12/13 FOMC meeting, down from a 93% chance yesterday. A stronger dollar can pressure gold and other commodities by making them more expensive overseas.

Benchmark 10-year Treasury yields also rose modestly on the news, rising 0.038 percentage points to 4.297%. Rising yields can weigh on gold by increasing the opportunity cost for holding it instead of bonds.

During Boston Fed President Susan Collins’ speech this morning, the only Fed speech planned today, she said she believes the US economy will start to soften later this year and expects weak growth to continue in 2024. She also believes the Fed may be near or at the end of their rate hiking campaign but would continue to be data dependent. Investors will be looking to see if there is similar consensus from other Fed President during the additional six speeches scheduled for tomorrow and Friday.

The other precious metals were lower once again, with silver down 1.5% and platinum and palladium down 1.9% and 0.3%, respectively.

At the Comex close: December gold slid $8.40 to $1,944.20; December silver lost 37¢ to $23.50; October platinum fell $18.20 to $915.30; December palladium was down $3.30 to settle at $1,210.70 an ounce.