Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold surged 2.5% to close above $1,998 as soft manufacturing data weakened the dollar and lowered Treasury yields, lifting demand for alternative stores of value. Briefly surpassing $2,000 in intraday trading, the metal posted its biggest daily rise in four months and highest finish in almost a week.

The Empire State manufacturing index fell sharply in August, indicating slowing growth because of the resurgence of COVID-19. Disruptions in supply chains, decreasing demand, and increasing uncertainty about the course of the pandemic are causing business conditions to deteriorate more quickly than forecast.

The Mortgage Bankers Association reported the rate of delinquencies on home loans more doubled in the second quarter as millions of Americans lost work due to coronavirus layoffs. Still, housing remains a bright spot in an otherwise dimming economic outlook, with homebuilder confidence rising to match its record high in August, driven by historically low mortgage rates.

The dollar fell 0.3% against major rivals as traders increasingly expect the US rebound to lag other major economies, which have done a better job of containing the pandemic. A weakening dollar lifts gold and other commodities priced in it for global trade by making them less expensive in other currencies.

Yields on benchmark 10-year Treasury's slipped from an eight-week high, further supporting gold, after the data on slackening business conditions in the New York Fed region. Lower yields support gold, which offers no yield itself, by decreasing the opportunity cost for holding it instead of safe-haven bonds.

And finally, Warren Buffet helped to energize the gold market by investing more than $500 billion in Barrick Gold, the world's second-largest gold producer, through Berkshire Hathaway.

The other precious metals were also higher, with silver and palladium jumping 6% and 4.2%, respectively, while platinum added 0.9%.

At the Comex close: December gold surged $48.90 to $1.998.70; September silver jumped $1.57 to $27.67; October platinum added $8.50, to $967.60; and September palladium climbed $90 to $2,233.80 an ounce.