Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slipped 0.5% to close under $1,971 after falling jobless claims boosted yields and the dollar despite other weak US data, undercutting alternative stores of value.

First-time filings for unemployment fell by 9,000 last week to a two-month low of 228,000. The second straight week of declining claims signaled that the labor market remains quite strong and layoffs, a sign of a cooling economy, are not materializing.

The dollar jumped 0.6% against major rivals following the jobless data on speculation that residual strength in the job market may keep interest rates higher for longer. A rising dollar weighs on gold and other commodities by making them pricier overseas, reducing demand.

Benchmark 10-year Treasury yields rebounded to 3.85% while yields on the 2-year Treasury, more directly tied to near-term interest rate projections, pushed back above 4.8%. The moves further increased the yield-curve inversion between the two, something that often prefigures recession.

Seizing upon the jobless data, the markets looked past a pair of economic reports pointing to economic weakness. The Conference Board's index of leading economic indicators fell for the fifteenth straight month. And separately, the Philly Fed manufacturing index was stuck in contraction of the eleventh straight month.

The other precious metals were also lower, with silver sliding 1.7% while platinum and palladium lost 2.1% and 2.5%, respectively.

At the Comex close: August gold dropped $9.90 to $1,970.90; September silver shed 43 cents to $24.96; October platinum fell $20.70 to $964.10; and September palladium declined by $32.10 to $1,275.30 an ounce.