Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold fell 1.4% to close under $1,991 as hawkish comments from another Fed official reinforced expectations of a May rate hike, lifting Treasury yields and pressuring alternative assets. The metal lost 1.3% for the week and closed under $2,000 an ounce for the first time in three weeks.

In a week replete with Fed jawboning, Cleveland President Loretta Mester added her voice to the hawkish choir, saying that monetary policy will need to move "further into more restrictive territory." Mester joined New York Fed President John Williams and Fed Governor Christopher Waller in calling for another rate increase to bring down inflation.

Fed funds futures traders are projecting a quarter-point hike to between 5% and 5.25% with nearly 90% certainty when the central bank meets again in early May. But traders are also betting that the Fed will cut rates by at least a half-point by year end.

The hawkish near-term outlook was supported by upbeat PMI reports for April. S&P Global said the US services sector improved to a 12-month high while manufacturing rose out of contraction for the first time in six months.

Benchmark 10-year Treasury yields rose near 3.6% on the rate view, pressuring gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar was virtually unchanged for the day but rose 0.2% for the week, its first weekly increase in two months. A stronger dollar weighs on gold by making it pricier in other currencies.

The other precious metals were mixed. Silver slid 1.2% for a weekly loss of 1.6%. Platinum rose 2.8% for a weekly increase of 8%. Palladium added 1.2% today and 7.4% this week.

At the Comex close: June gold lost $28.60 to $1,990.50; May silver slid 32 cents to $25.06; July platinum climbed $31.10 to $1,138.70; and June palladium advanced $18.70 to $1,607.40 an ounce.