Current Prices: Gold USD 2,445/oz (AUD 3,765) and Silver USD 28.52/oz (AUD 43.93)
Gold Prices soared to new heights overnight during the US session, hitting an all-time peak in AUD terms. The metal closed at a record-breaking $3,765, surpassing the previous high set in April, which was $3,725. Financial markets have more than fully priced a 25bp cut by the Fed in September. Both US and European equities closed lower overnight.
US and European equities took a hit overnight. US share markets plunged on Thursday night, rocked by economic data suggesting the US economy might be cooling faster than expected, while the Federal Reserve continues its stringent monetary policy. The Dow Jones plummeted 495 points, a 1.2% drop, while the S&P 500 shed 1.4%, and the Nasdaq tumbled 405 points, or 2.3%.
In the bond market, US government yields continued their descent on Thursday. This drop was fueled by weak ISM manufacturing data and disappointing weekly initial jobless claims, leading traders to anticipate at least three interest rate cuts from the Federal Reserve this year. The 10-year Treasury yield fell to 3.98%, the lowest level since February, slipping 12 basis points.
The US dollar strengthened against major currencies during European and US trading hours. The Euro slipped from $1.0827 to $1.0775, closing near $1.0790. The Australian dollar also faced headwinds, falling from US65.59 cents to US64.87 cents, with a close around US64.95 cents.
Looking forward we have the RBA interest rate decision this week, which is largely expected to be a hold for now, given the latest inflation numbers. Rate expectations for the RBA have moved away from a hike to a potential cut as early as November this year, according to CBA analysts.
Australian gold prices were up +0.58% (+$22 per oz) last night
Australian silver prices down -1.1% (-$0.50 per oz) last night
The Gold: Silver Ratio rose to 85.7 : 1
Current AUD/USD is 0.6499
Gold (AUD) Chart
Silver (AUD) Chart
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