Monthly Summary

August 2020

August was a volatile month for precious metals. In the first week of August, gold soared to a new record of $2,075 and silver neared the $30 threshold for the first time since early 2013. But metals slid over the next few weeks as pressure from a rising US dollar and record setting equity prices began to take its toll on metals. Gold finished nearly where it began the month at $1,968.10, up 0.1%. Silver, which many consider to be undervalued in relation to gold, fared better, rising 17.5% to finish at $28.43. Platinum and palladium finished August up 2.4% and 6.4% respectively. 

 

Metals began the month strong coming off the heels of a record-breaking July. Gold and silver surged 5% and 22% respectively during the first week of August and seemed unstoppable. A rising US dollar and news of an effective COVID-19 vaccine out of Russia quickly swung momentum away from haven assets and metals plummeted. On August 11, gold fell over $120, its worst single day performance since 2013 and silver dropped over $4. 

 

Stocks had a strong August with all three major indices rising for the fifth consecutive month. The Dow rose 7.6% which was its best August performance since 1984 and the S&P 500 finished up 7.0%, hitting a record high in the process. The Nasdaq outperformed the others as tech stocks continued to dominate, and finished August up 9.6% which was its best monthly performance since 2000. 

 

While stocks outperformed metals in August, increasingly tense relations between the US and China and ongoing negative economic data later in the month helped boost metals. Additionally, the Fed changed its inflation target from 2% to an ambiguous target rate higher than 2% in an attempt to reach full employment and price stability in a time of long-term low inflation. In other words, rates will likely remain close to zero well into noticeable economic recovery which bodes well for metal prices heading into the fall. 

 

 

 

 

Historical Trends & Pricing

Commentaries

September 23, 2020

Gold and silver continued downward on Wednesday, falling 2.2% and 6.7% respectively to their lowest levels since July 21.  The drop comes as equities are getting crushed as well.  The Dow and S&P 500 closed 1.92% and 2.37% in the red today and the Nasdaq was hardest hit, falling over 3%.  The US dollar continues to rise, hitting its highest level since mid-July.

 

September 21, 2020

Gold and silver plunged to their lowest levels since July on a surging US dollar and a significant equity selloff.  Much of the rise in the dollar and falling stock prices can be attributed to a resurgence of COVID-19 cases throughout Europe, putting several countries at risk for another lockdown. The Dow dropped about 510 points, its worst day in three weeks and the S&P 500 fell 1.2% today.  The Nasdaq outperformed the others, boosted by tech stocks, finished down only 0.1%.

 

September 16, 2020

Gold and silver initially rose slightly after today’s expected Fed announcement to leave interest rates unchanged but have since dipped and are trading at $1,953.50 and $27.05 respectively.  More important was the Fed’s indication that rates will likely remain near zero through 2023 to help reach their inflation target.  Stocks are mixed on the news with the Dow and S&P in the green and the Nasdaq currently down about 0.40%.  The Fed also renewed its commitment to asset purchases to aid in economic recovery, which should help boost equities, at least in the short term.

September 14, 2020

Gold and silver are both up to begin the week, currently trading at $1,958 and $27.33 respectively,  which are their highest levels since last Wednesday.  The rise comes as the US dollar slipped Monday.  Equities are up across the board on promising COVID-19 vaccine news after AstraZeneca announced this weekend that they will resume trials after halting them over health concerns last week.  The Nasdaq is up 190 points or 1.75% and the Dow and S&P 500 are up 1.0% and 1.1%.

September 4, 2020

Today’s positive jobs report had little effect on markets as yesterday’s selloff continues to hammer stocks.  The US added 1.37 million jobs and unemployment dropped to 8.4% (vs. 1.32 million and 9.8% expected). The Nasdaq is down 3% and on pace for its worst 2-day performance since early March as tech stocks are getting crushed. The S&P and Dow are down 1.7% and 1.3% respectively.  Gold and silver are trading at $1924 and $26.60 down 3.3% and 8.0% from their weekly highs reached on September 1. September is historically the worst month for stocks, and even though March will likely be the worst for 2020, markets are trying to stick to tradition based on the last week.

September 2, 2020

Gold and silver both slipped today as a strengthening US dollar and record equity prices continued to put downward pressure on metals. Gold saw over a $50 swing from yesterday’s high and today’s low and silver dropped more than a $1.50 in the last 24 hours. Both metals are up slightly on the reopen, trading at $1940 and $27.42 respectively. Today’s ADP employment data came in far worse than expected but investors seem to be shrugging it off. Friday’s job report should be a better indicator of US recovery and will likely rattle what are already considered extremely volatile markets.

August 26, 2020

Gold and silver rose sharply on Wednesday as US-China relations continue to deteriorate amid ongoing pandemic blame, and now Chinese military exercise in the South China Sea.  Gold is up $32, trading at $1,944.60 and silver is up $1.17, trading at $27.43 which is its highest price of the week. The Nasdaq and S&P 500 are up 1.60% and 0.80% respectively on strong July durable goods data.  The Dow is effectively flat midday, up 10 points or 0.04%. 

August 24, 2020

Gold and silver fell today as promising COVID-19 treatment news helped equities rise to begin the week.  Both the S&P 500 and the Nasdaq hit record highs today and the Dow Jones is up 260 points currently, still nearly 1,400 points back from its February high.  Gold and silver are nearing a 2-week low, but getting some support from ongoing weak economic data and pandemic stimulus spending, trading at $1,930 and $26.60 respectively.

August 19, 2020

Gold and silver continue their see-saw trading with both metals down sharply on Wednesday.  Gold is trading at $1,957 after re-breaking $2,000 yesterday and silver is down $0.72 or about 2.6%.  Equities are up modestly on strong retail earnings and increased morale after the S&P closed at an all-time high yesterday.  Fed minutes due out this afternoon should provide greater insight into future monetary policy and could rattle markets as has been the case in previous months during this pandemic. 

 

August 17, 2020

Gold and silver rose sharply on Monday as the US dollar weakened and the Empire State manufacturing index dropped significantly, suggesting a decline in the rate of economic recovery for August in the US.  Gold and silver are up about 5% and 14% respectively from last week’s lows.  Stocks are mixed today but positive overall.  The S&P is up about 0.33% and within 10 points of its record high while the Dow is down 60 points.  The Nasdaq is up about 1% heading into the final minutes of trading.

August 14, 2020

Gold is down $18.30, trading at $1,939.60 and is looking to close the week in the red for the first time in over 2 months.  Silver is currently down $1.43 today, and on pace to close the week down 7%.  Stocks, which rose sharply yesterday after Tuesday’s selloff, turned slightly negative going into the final hour of trading.

August 12, 2020

Gold has recovered some of its losses after falling over $120 yesterday in its worst single day performance since 2013.   Gold is currently trading at $1,945, up $70 from its overnight low, but still down about $135 from its Friday high.  Silver is currently up nearly $2.00 but still down over $3.50 from last week’s high.  Stocks are up across the board with the Nasdaq leading the pack 2.2% in the green.

 

August 10, 2020

Silver continues to outshine gold as it breaks $29.00 and brings the gold/silver ratio back below 70 after rising as high as 115 in April.  Gold is faring well still, currently up $12 trading at $2,023.  Physical demand remains strong for both metals and decreased production across most major Mints and Refiners continue to tighten supply and boost premiums. Stocks are mixed today with the S&P 500 flat, the Dow up about 1%, and the Nasdaq down about 0.75%.

August 07, 2020

Gold and silver pulled back in overnight trading, and have since declined further after July’s employment data came in better than expected. Unemployment fell to 10.2% and 1.8 jobs were added for the month.  Stocks are mixed with the S&P500 and Dow flat, and the Nasdaq down about 0.45%.  Even with the pullback, gold and silver are looking to close the week up 2.5% and 14.5% respectively and silver is up nearly 240% from its March low.

August 03, 2020

Gold is holding steady around $1,970 and silver is up $0.25, currently trading at $24.45, as Congress is more likely to agree to a new round of stimulus aid as COVID-19 cases continue to increase throughout the US. Equities rose on the news too, with the Dow and S&P 500 up about 1% each going into the last hour of trading.  The Nasdaq broke a new record, reaching 10,927.56 on strong tech earnings, and is currently up 1.6%.

July 31, 2020

Metals rebounded Friday after falling yesterday in unison with equities in response to the abysmal GDP data.  Gold is currently trading at $1,969 and silver at $24.27, on course to finish the month up around 10% and 30% respectively.  Stocks are lagging with the Dow and S&P 500 both firmly in the red, and the Nasdaq up only marginally on strong tech earnings. 

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