Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold tumbled 2.5% to close under $1,764 after a blowout jobs report lifted bond yields and the dollar, undercutting demand for alternative stores of value. The metal dropped 3% for the week, marking its biggest weekly decline since mid-June.

The US created 943,000 new jobs in July, according to federal nonfarm payrolls data, as the economy shook off the effects of the Delta variant and kept on chugging. While somewhat inflated by 240,000 seasonal additions to government payrolls in education, it was the biggest monthly increase in a year, knocking the overall unemployment rate down to a pandemic low of 5.4%.

The dollar jumped 0.6% as traders speculated that the stellar jobs print will spur the Fed to begin withdrawing monetary stimulus sooner than previously thought. A stronger dollar pressures gold and other commodities priced in it for global trade by making them more expensive in other currencies, undermining demand overseas.

Benchmark 10-year Treasury yields climbed above 1.3% on the prospect that the Fed will accelerate the timeline for tapering quantitative easing, its $120 billion-per-month program of buying bonds to flush cash into the economy. Rising yields weigh on gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Wall Street was mixed in its reaction, with highly-leverage growth stocks like technology shares falling on the looming likelihood of higher interest rates and rising inflation, while cyclicals rose on optimism about an accelerating economy. The Dow and S&P 500 added 0.3% and 0.1%, respectively, reaching new records, while the tech-heavy Nasdaq slid 0.5%.

The other precious metals were also sharply lower. Silver shed 3.8% for a weekly loss of 4.8%. Platinum lost 3.3% today and 7.3% this week. Palladium slid 0.9% for a weekly loss of 1%.

At the Comex close: December gold tumbled 45.80 to $1,763.10; September fell 97 cents to $24.33; October platinum dropped $33.50 to $972.20; and September palladium gave up $25 to end at $2,630.10 an ounce.