Daily Gold Update

Source:Dana Samuelson, American Gold Exchange

AustinGold, silver, platinum and palladium all surged higher following the release of the August federal nonfarm payroll data. With the U.S. reporting almost half a million fewer jobs than analysts expected to be created in August, and GDP estimates for Q3 falling sharply, uncertainty as to whether the Fed would indeed be able to begin tapering asset purchases in 2021 affected all markets. The prospects for continued QE through the end of 2021 buoyed metals. Tantamount to printing money, QE supports gold by undermining the dollar and pressuring yields.

According to the BLS, the U.S. created just 235K new jobs in August. Despite the blockbuster July jobs number being revised upward from 935K to 1.05M, the August report of just 235K new jobs was a huge disappointment compared to analyst expectations of 725K new jobs for August. The surge in delta variant covid-19 cases and difficulty in hiring employees were the two main reasons analysts cited for the dismal August jobs report. Hourly earnings rose a strong 0.6% last month, twice as much as forecast, signaling employers are paying up for the help they need but cannot always find. In August 5.6 million people reported they were unable to work because of the pandemic, up 400K from July.

Further dampening the US economic outlook, U.S. GDP expectations for Q3 2021 have plummeted over the last several weeks. Morgan Stanly slashed their Q3 GDP estimate to just 2.9% yesterday while both the Atlanta Fed GDP Now and the New York Fed Staff Nowcast have substantially lowered their Q3 GDP estimates over the last several weeks from over 5% to 3.7% and 3.8% respectively. Previous U.S. GDP for 2021 has been robust, coming in at 6.3% in Q1 and 6.6% in Q2.

In a positive sign, gold finished the New York trading session at $1,830.90, breaking above short-term upside resistance gold has encountered at $1,820 over the last several weeks. Silver surged from just over $24.00 yesterday to almost $25.00 today. Platinum and palladium both moved higher as well.

At the Comex close: December gold surged $20.30 to $1,831.80; December silver gained 87 cents to close at $24.78; October platinum gained $27.40 to $1,021.60; and December palladium gained $21.10 to $2,421.50 per ounce.