Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold tumbled 1.3% to close at an 18-month low of $1,185 as Turkey's currency crisis and rising trade tensions boosted the dollar and fueled a selloff in commodities.

Responding to the Trump administration's more than doubling of tariffs on its steel and aluminum, Turkey doubled duties on US imports amounting to an estimated $1 billion per year. Separately, China filed a complaint with the World Trade Organization contesting the legality of US tariffs on solar energy manufacturers.

US stock indexes fell as trade-war tensions killed risk appetite. The Dow fell nearly 0.6%, the S&P 500 0.8%, and the Nasdaq 1.2%. The CBOE Volatility index, often called the Wall Street fear gauge, jumped to a 6-week high.

Commodities were especially hammered, with the Bloomberg Commodity Index plunging nearly 2% to a 13-month low. West Texas Intermediate crude dumped 3.3% to a 10-week low on global-growth concerns and an unexpected rise in domestic inventories. Gold often trade in sympathy with oil as a hedge against energy-related inflation.

The dollar extended its rally, adding another 0.2% to notch a three-session rise of 1.9%, as traders continue shifting away from emerging market currencies, the UK pound, and the euro. While the Turkish lira rebounded mildly for a second day, concerns remain that its fragility could spread contagion through eurozone banking system. A rising dollar pressures gold and other commodities by making them more expensive in other currencies.

The dollar was further supported by a spate of upbeat US economic data. Retail sales rose more than forecast in July, signaling solid GDP momentum in Q3. Factory output rose, with the Empire State manufacturing index jumping to a 10-month high, and US productivity picked up by the most in three years.

On the other side of the ledger, home builder sentiment dropped to an 11-month low on pessimism about the consequences of tariffs and trade conflicts on the price of key building materials.

The other precious metals also fell sharply, with silver plunging 4% while platinum and palladium lost 3.7% and 6%, respectively.