Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold edged up less than 0.1% to close near $3,303 after subdued CPI data pressured Treasury yield and the dollar. Bullion then jumped another $24 to more than $3,347 on the world spot market on speculation that the Fed may be more likely to cut interest rates this fall. Silver fell 1% to $36.16 an ounce.

Consumer prices rose a scant 0.1% in May, less than forecasts of 0.2%, as lower gasoline prices helped to keep a lid on the cost of living. The annual inflation rate rose to 2.4% from 2.3% in April.

Investors will keep a careful eye on tomorrow's release of the produce-price index for signs that tariffs are starting to filter through the pipeline. Wholesale inflation, as measured by the PPI, typically front-runs consumer inflation by several months.

Benchmark 10-year Treasury yields fell sharply on speculation that the Fed will resume lowering interest rates this fall. Fed funds futures traders now see a 70% likelihood of a quarter-point cut in September. A stronger auction on 10-year notes also weighed on yields.

Tracking lower with yields, the dollar lost 0.4% against major rivals, supporting gold by making it cheaper in other currencies.

Platinum rose 4% and palladium picked up 0.4%.

At the New York spot close: gold added 40 cents, to $3,321.30; silver shed 38 cents to $36.16; platinum gained $48.30 to $1,258.10; and palladium rose $4.70 to $1,072.90 an ounce.