Gold Slips On Durable Goods

Gold Slips On Durable Goods

Gold slips this morning on strong durable goods data, helping investors overcome some of their fears about the global economy, which is typically bullish for precious metals. Meanwhile, the markets are keeping an eagle eye on what the Fed Chair will say at Thursday’s Economic Symposium.

Overall durable goods surged 11.2% in July, compared with the forecast of a 4.3% increase and the 7.6% increase a month earlier. Gold dropped on the news, with the most actively traded futures contract falling to $1,908, but the metal has since recovered to a position above $1,920 an ounce. New orders for key U.S.-made capital goods slowed in July, suggesting the rebound in business investment could become more gradual amid uncertainty about the course of the Covid-19 pandemic.

Next up, investors are awaiting further direction from Federal Reserve Chairman Jerome Powell, who is scheduled to speak on the state of the economy Thursday at the Kansas City Fed’s annual symposium that is typically held in Jackson Hole, Wyoming. The event is being livestreamed this year. Any signals from Powell that the Fed will keep interest rates low and inject more stimulus into the economy would be bullish for gold.

Any signs that the U.S. and China may resolve their longstanding trade dispute would be bearish for the gold, which saw a run-up in prices in 2019 when tensions worsened and investors sought a hedge against uncertainty. Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin had a phone call Tuesday to discuss implementing phase one of an agreement reached between the two superpowers after last year’s standoff.

Gold futures fell 0.8% Tuesday to settle at $1,923.10 an ounce on Comex. The December contract decreased 1.2% in the first two days of the week. Futures are down 3.2% so far this month. Many investors have been taking profits since the contract closed at a high of $2,069.40 on Aug. 6. The yellow metal is up $400 — or 26% — so far this year. Currently, the December contract is $1,923.40 an ounce while, the DG spot price is $1,922.50.

Silver futures dropped 1.3% Tuesday to settle at $26.43 an ounce on Comex, and the December contract is down 1.7% so far this week. The most active contract has gained 9.1% so far this month after soaring 30% in July. The December contract is currently up at $26.655, while the DG spot price is $26.52.

U.S. consumer confidence dropped to the lowest level since 2014 in August as millions of Americans lost their jobs as a result of coronavirus lockdowns and the likelihood of additional federal stimulus stalled in Washington.

Investors are watching for the weekly U.S. initial jobless claims report on Thursday. In the last report, the number of Americans filing new applications for unemployment benefits rose back above 1 million after dipping below in the prior week for the first time in 21 weeks.

The virus known as COVID-19 has killed almost 820,000 people worldwide and sickened 23.9 million. About 24% of the cases — and 22% of the deaths — are in the U.S. The country has 5.78 million cases, more than any other nation.

Republicans officially nominated President Donald Trump for re-election at their quadrennial convention this week. Democrats nominated Joe Biden last week.

Spot palladium increased 0.6% Tuesday to $2,188.00 an ounce and is up 20 cents so far this week. Spot platinum rose 0.8% Tuesday to $934.90 an ounce, and it’s up 1% for the first two days of the week. Currently, platinum’s DG spot price is down at $929.40 an ounce, while the palladium is up at $2,183.60.


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