Carat$4,041.70: gold's first monthly gain since February
Kitco's Friday close puts gold at $4,041.70, down $60.90 or 1.48% on the day. July still finished about 0.5% higher, ending a four-month losing run, as the dollar rebounded from a six-week low.
§1The day and the month.
Gold lost the day and won the month. Kitco's Friday close, timed at 5pm New York, put spot at $4,041.70 an ounce, down $60.90 or 1.48%, the weakest session of the week. Across July as a whole the metal still finished roughly 0.5% higher, its first monthly gain since February and the end of a four-month losing run. Trading Economics puts gold 20.22% above where it stood a year ago. Markets are shut until Monday, so this is the number the trade opens August against.
Friday's fall had a single cause. The dollar rebounded from a six-week low, and traders unwound the rally that followed the Federal Reserve's decision to hold rates, a decision that had carried gold above $4,100 on Thursday. Softer inflation data and an unchanged policy rate should have been supportive. They were outweighed by expectations that the Fed's next move is more likely to tighten than to ease, and by the ordinary mechanics of a crowded position being closed before a weekend.
§2One dollar bounce.
This desk carried a higher figure yesterday. An intraday print put July's gain at about 1.4%, and Friday's close revises that down to roughly half a percent. The correction matters less for its size than for its source: reference-point drift between morning quotes and settlement prices has produced three inconsistencies in this tape in two weeks. From today the tape carries the Kitco 5pm New York close and nothing else, so a day change here means a change against the previous settlement rather than against whichever intraday snapshot happened to be visible.
Markets are shut until Monday, so this is the number the trade opens August against.
§3A correction, and a new standard.
For the bench the month is the only number worth planning against. Gold spent July absorbing a Fed hold, a war premium and a dollar bounce, and finished higher regardless. At $4,041.70 an ounce fine metal costs about $130 a gram before refining, alloy, loss or making charge. A retailer still quoting from a January card is short roughly a fifth of its metal cost, and a customer funding a new piece with old chain is working the same arithmetic from the other side of the counter.
Five months of falling prices ended without a catalyst, which is the most informative thing about them. Nothing was announced in July that gold did not already know, and the metal rose anyway, which says the marginal buyer is no longer waiting for a reason. The practical instruction is unchanged and now better evidenced: price inventory, insurance and trade-in policy off a $4,000 handle, because a metal that will not break down on bad news is not a metal that is waiting to fall. Anyone budgeting for a return to $3,500 has now had five months to be right and was not.
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