Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slipped 0.2% to close under $1,918 after upbeat data and hawkish Fed talk lifted yields and the dollar, undercutting alternative assets. It was the metal's third straight lower session.

The US economy grew at an annual rate of 2% in the first quarter, the Commerce Department reported, significantly faster than the earlier estimate of 1.3%. Consumer spending, the drive wheel of GDP, rose 4.2% rather than the initial 3.8% print.

Economic growth in the second quarter, ending Friday, is projected to be between 1% and 2%.

First-time jobless claims fell by 26,000 to a one-month low of 265,000 last week, signaling residual strength in the labor market. The decrease interrupts a two-month uptrend.

Following strong consumer confidence, housing sales, and durable goods reports this week, the solid data has reinforced expectations that the Fed will resume rate hikes when it meets again in July. Fed fund futures traders see an 87% chance of a quarter point increase, up from 74% last week.

In addition, Fed Chair Jerome Powell told Spanish central bakers in Madrid today that "a strong majority" of Fed officials foresee two more hikes this year, further underscoring the likelihood of an imminent move.

Benchmark 10-year Treasury yields rose to 3.85% on the hawkish outlook, pressuring gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar tracked higher with yields, rising 0.4% against major rivals. A stronger dollar weighed on gold and other commodities by making them pricier in other currencies.

The other precious metals were also lower. Silver dropped 1.2%; platinum lost 2%, and palladium shed 1.6%.

At the Comex close: August gold slipped $4.30 to $1,917.90; September silver slid 29 cents to $22.80; October platinum shed $18.10 to $906.80; and September palladium lost $19.50 to $1,227.40 an ounce.