Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold surged 1.5% to close above $1,952 despite upbeat data and rising stocks as bargain-hunters swept in ahead of tomorrow's speech on monetary policy by Fed Chair Jerome Powell, who is expected to signal additional monetary stimulus.

Speaking on Thursday at the virtual Jackson Hole summit of global central bankers, Powell is widely expected to present a new framework for US monetary policy that will allow inflation to run higher for longer before raising interest rates.

Known as inflation averaging, the new approach emerged from two years of research by the central bank into revising its dual goals of maximum sustainable employment and stable prices.

With the recovery stalling and unemployment still near-Depression levels because of COVID-19, the Fed is looking for new ways to stimulate the economy. The revised framework would allow inflation to rise well beyond the longstanding target of 2% before prices–and growth– are constrained by higher interest rates.

In addition, traders anticipate that Powell will signal other easing programs in his speech, like deeper quantitative easing and perhaps new lending facilities for businesses.

Tantamount to printing money, QE and other forms of monetary stimulus have help drive gold higher by 28% this year to new all-time highs as investors sought protection from risk of rising long-term inflation and currency debasement. Its recent pullback under $1,925 prompted a rush of bargain-hunting ahead of Powell's speech.

Durable goods orders jumped more than 11% in July on strong demand for cars and trucks, while orders for other industrial goods grew at a slower pace under 3%. Core orders, a key measure of business investment that excludes defense and transportation, returned almost to pre-pandemic levels.

Stocks continued to rally as strong tech players like Amazon, Tesla, and Netflix pushed the Nasdaq and S&P 500 up by 1.7% and 1%, respectively.

The other precious metals were also higher, with silver rising 4.4% while platinum and palladium added 0.6% and 0.9%, respectively.

At the Comex close: December gold climbed $29.40 to $1,952.50; September silver climbed $1.18 to $27.45; October platinum added $5.80, to $939.80; and September palladium picked up $18.70 to $2,190.60 an ounce.