Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold fell 1.1% to close at a one-month low of $3,275 after a trade agreement with China reduced safe-haven demand while weak US data lowered expectations of an imminent rate cut from the Fed. Bullion lost 2.8% for the week. Silver dropped 1.4% but held a weekly rise of 0.3% to $36.09 an ounce.

The US and China reached an agreement on expediting rare earth shipments to the US, suggesting a thaw in frozen trade negotiations between the world's two biggest economies. Rare earths are key resources for the making of tech products.

With the truce between Israel and Iran apparently holding, the China agreement drained some of the safety premium out of the markets and lifted risk appetite. The Dow rose 1% while the S&P 500 and Nasdaq both added 0.5%.

The risk rally came despite another spate of soft US economic data. Consumer spending fell 0.1% in May, the first decline since January. Household spending accounts for 70% of the economy.

Separately, the core Personal Consumption Expenditures index, the Fed's preferred inflation gauge, rose 0.2% last month, lifting the 12-month rate to 2.7%. Fed Chair Jerome Powell said this week that further rate cuts are dependent on inflation continuing to fall.

Benchmark 10-year Treasury yields crept back toward 4.3% on the soft data dimming rate view. Higher yields weigh on gold by increasing the opportunity cost for holding it instead of bonds.

Tracking with yields, the dollar added 0.2% against major rivals, pressuring gold and other commodities by making them pricier overseas.

Platinum fell 6.5% but still gained 6.1% this week. Palladium added 0.8% for a weekly rise of 8.3%.

At the New York spot close: gold fell $58.90 to $3,275; silver shed 50 cents to $36.09; platinum lost $89.85 to $1,341.25; and palladium picked up $9.20 to $1,143.80 an ounce.