Daily Gold Update

Source:Matt Warden, American Gold Exchange

AustinGold broke over $1,820 this morning after a huge miss in ADP payrolls but slipped back as the day progressed to close 0.01% lower at $1,816.00 per ounce. Dual measures on manufacturing growth were mixed but, as with the ADP report, also indicated contracting employment growth. The Federal Reserve has repeatedly indicated incoming employment data will determine the timing of any taper to their $120 billion per month buying program of US Treasuries and mortgage-backed assets.

For the second month in a row, the ADP employment report showed a slowdown in hiring, with just 374,000 new jobs added on expectations of 600,000 new jobs. While nearly 4 million jobs have been added so far this year, U.S. employment remains 7 million jobs short of pre-pandemic levels.

Market Manufacturing PMI contracted modestly in August, from 63.4 in July to 61.1, mainly due to material shortages hampering production. On the other hand, the latest ISM report increased modestly to 59.9 from 59.5 the month prior amid strong order growth. But a measure of factory employment in the ISM report contracted to its lowest level since November 2020, as shortages of supplies and workers persists.

In a recent speech in July, Federal Reserve Governor Lael Brainard said the Fed would need to see more improvement in the U.S. labor market before pulling back on support for the economy, indicating the central bank will likely wait to see what progress has been made once the September data is in hand. At the time, she stated 'employment has some distance to go'.

In a more recent speech, Federal Reserve Governor Christopher Waller said he would like to see employment rising by 800,000 to 1,000,000 jobs in the August and September report before reducing support.

The ADP report has underestimated the BLS nonfarm payroll report 5 of the last 7 months. Markets and metals are seemingly on pause as traders await the nonfarm payroll report for August scheduled for release this Friday at 8:30 AM Eastern.

The other precious metals were mixed today, with silver bumping 0.9% higher, and platinum and palladium dipping 1.4% and 1.2% lower, respectively.

At the Comex close: December gold settled down $2.10 to $1,816.00; December silver added 21 cents to $24.22; October platinum dropped $14.50 to $999.60; and December palladium gave back another $29.50 to close at $2,441.50 an ounce.