Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold slipped 00.6% to close under $2,342 as positive US data and hawkish comments from a Fed official lifted yields and the dollar, undercutting alternative stores of value. Silver added 0.7% to finish at $32.19 an ounce.

The Feds Beige Book said the economy continued to expand in April and May, with 10 of the Feds 12 districts experiencing slight or modest growth. However, businesses reported being somewhat more pessimistic because of inflation, high interest rates, and political uncertainty over the presidential election.

Minneapolis Fed President Neel Kashkari told CNBC today that he wants to see many more months of softer inflation data before advocating for interest rate reductions. He also said rate hikes cannot be ruled out if inflation climbs again. Kashkari is not currently a voting member of the FOMC.

This Fridays release of the latest PCE index should give a better indication of the course of inflation and therefore interest rates.

Benchmark 10-year Treasury yields climbed above 4.6% on the upbeat data and hawkish Fed jawboning, pressuring gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Tracking higher with yields, the dollar rose 0.5% against the major rivals as the yen tumbled to a 4-week low. A stronger dollar weighs on gold and other commodities by making them more expensive in other currencies.

Platinum and palladium lost 1.8% and 1.4%, respectively.

At the New York spot close: gold slipped $13.33 to $2,341.90; silver rose 21 cents to $32.19; platinum shed $18.90 to $1,047.90; and palladium dropped $13.60 to $964 an ounce.