Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slipped 0.3% to close under $1,969 as solid-if-mixed US economic data continued to lift Treasury yields and pressure safe-haven assets. It was the metal's third straight down session.

The ISM reported the US service industries expanded for the seventh straight month in July despite ongoing inflation and high interest rates. While the index softened slightly, dipping to 52.7% from 53.9% in June, it nonetheless indicated avid demand for travel, hospitality, and dining out. The services sector employs around two-thirds of American workers.

First-time jobless claims held near a five-week low, edging up 6,000 last week to 221,000. Combined with yesterday's robust ADP of 324,000 new jobs added by the private sector in July, the jobless data reinforced the residual strength of the US labor market.

The productivity of US workers rose at a pace of 3.7% in the second quarter, up from a decline of 1.3% in Q1. But the number of hours worked by employees fell for the first time since 2020, registering some slack in the economy.

Benchmark 10-yeart Treasury yields reached the highest level of the year, rising to nearly 4.2%, as traders responded to yesterday's ADP report, Fitch's downgrade of US debt rating, and plans by the Treasury to borrow another $1 trillion.

Rising yields are a headwind for gold because they increase the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar was little changed, adding 0.4% early in the session only to retrace that move after the Bank of England raised rates by a quarter-point.

Stemming gold's slide, US benchmark WTI crude jumped 2.6% after Saudi Arabia extended its production cut for another month. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were mostly lower, with silver and platinum dropping 0,7% and 0.9%, respectively, while palladium picked up 1.2%.

At the Comex close: December gold slipped $6.20 to $1,968.80; September silver dropped 18 cents to $23.70; October platinum shed $8.60 to $921.80; September palladium gained $15.60 to $1,257.40 an ounce.