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Thursday, August 20, 2026
What’s happening: Gold prices edged lower this morning after recording sharp gains in the previous session.
What happened: Gold prices jumped more than 3% in yesterday’s trading session, hitting their strongest level in over two-and-a-half months, following an announcement by the US Treasury Department.
Investors also responded to minutes from the Federal Reserve’s recent policy meeting, while strength in the US dollar weighed on gold prices this morning.
Why it matters: The US Treasury Department announced plans to double the repurchase of 10-year, 20-year and 30-year debt. This announcement came after 30-year yields jumped to their strongest levels since 2007 earlier this week.
Yields on 30-year US Treasuries declined sharply following the announcement on Wednesday.
Lower borrowing costs reduce the opportunity cost for holding precious metals like gold, which triggers demand for the bullion.
Economic data released by the US this week has dampened speculations of the Fed hiking its benchmark interest rates this year. Minutes from the Fed’s July meeting confirmed that some policymakers were in favour of hiking interest rates in 2026 to contain inflationary pressures.
Uncertainty in the geopolitical backdrop continued to weigh on market sentiment, especially after the temporary peace deal between the US and Iran expired on Monday.
Strength in the US dollar exerted pressure on gold prices as a higher greenback makes metals more expensive for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained to 98.84 this morning.
Spot price for gold fell 0.6% to $4,497.00 an ounce, after hitting its highest level since June 4 on Wednesday.
In other metals trading, spot price for platinum fell 0.8% to $1,806.70, while palladium slipped 0.1% to $1,331.83 this morning. Silver bucked the market trend, with its spot price rising 0.2% to $67.1425 an ounce this morning, following a gain of around 4% in the previous session.
What to watch: Investors will continue monitoring any developments between the US and Iran.
Data on initial jobless claims (1630 UAE Time) and Philadelphia Fed manufacturing index (1630 UAE Time) from the US will be released today. The number of people claiming jobless benefits in the US, which climbed by 9,000 to 209,000 in the first week of August, is expected to rise further to 210,000 in the latest week. Analysts expect the Philadelphia Fed manufacturing index to decline to 25 in August from 41.4 in the previous month.
Context: The Australian dollar fell versus the US dollar this morning as investors digested the latest jobs data.
Details: Data released this morning showed that employment in Australia fell by 15,800 to 14.81 million in July, compared to a revised 80,300 surge in the previous month. The figure also missed market estimates of a 15,000 gain.
The latest reading signalled the first monthly decline since April, with part-time employment shirking by 32,200 to a three-month low of 4.60 million. However, full-time employment climbed by 16,300 to a fresh high of 10.21 million.
Australia’s unemployment rate also rose to 4.5% in July, from both June’s reading and market estimates of 4.4%. The latest reading was the highest in three months, as the number of unemployed jumped by 4,200 during the month.
Meanwhile, Reserve Bank of Australia Deputy Governor Andrew Hauser warned that the central bank will have to increase rates again if inflation risks persist.
Strength in the US dollar also weighed on the Australian currency this morning. The US dollar index, which measures the greenback’s performance versus a basket of major peers, rose to 98.84.
The AUD/USD forex pair declined 0.2% to 0.7113 this morning, while the S&P/ASX 200 rose 0.26% to trade at 9,077.30.
What to watch: Investors await the release of economic data on S&P Global manufacturing PMI (0300 UAE Time), S&P Global services PMI (0300 UAE Time) and S&P Global composite PMI (0300 UAE Time) from Australia on Friday. The S&P Global Australia manufacturing PMI, which was revised higher to 52.0 in July versus the preliminary reading of 51.7, is expected to decline to 50.9 in August. Analysts expect the S&P Global services PMI business activity index to decline to 53.5 in August from 53.6 in the previous month, while composite PMI is projected to fall to 51.9 in August from 53.2 in July.
Other Markets: US trading indices closed mixed on Wednesday, with the Dow Jones index and S&P 500 up by 0.22% and 0.21%, respectively, and the Nasdaq 100 down by 0.22%.
Russia and Ukraine each exchanged 103 captured soldiers on Wednesday. The news sent the USD/RUB pair lower in forex trading this morning.
Japan’s trade deficit rose to ¥634.5 billion in July from ¥156.3 billion in the year-ago month, lending support to the USD/JPY forex pair.
Eurozone’s annual inflation accelerated to 2.9% in July from 2.8% in the previous month, which sent the EUR/USD pair lower in forex trading this morning.
Bank Indonesia left its key interest rate unchanged at 5.75% for the second consecutive meeting, which lent support to the USD/IDR forex pair.
US crude inventories jumped by 4.405 million barrels to 428.8 million barrels in the recent week, recording gains for the third straight week. However, spot price for WTI crude oil rose this morning.
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