Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slipped 0.6% to close under $1,984 as a rebounding dollar spurred traders to take profits despite falling bond yields and growing fears of banking contagion in Europe. The metal ended the week 0.5% higher for its fourth straight weekly advance.

Following Credit Suisse last week, Deutsche Bank became the latest systemically important financial institution to be shaken by the worst turmoil in the banking sector since 2008. Shares of the German giant tumbled 15% as the cost of its 5-year credit default swaps, the cost of insuring its debt portfolio against default, surged over the last two days to the highest level since 2018.

The dollar rebounded by 0.6% against major rivals Forex traders shifted away from euros and the UK pound on the banking worries. A rising dollar weights on gold and other commodities by making them more expensive overseas.

Benchmark 10-year Treasury yields edged lower as investors sought safety in government debt.

Yields fell and gold rose this week after the Fed, while raising interest rates a quarter-point, signaled the likely end of rate hikes after one more similar hike. The dovish pivot was attributed to expectations that instability in the baking sector will limit credit and stifle growth.

Falling yields typically boost gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The other precious metals were mixed for the day and higher for the week. Silver picked up 0.4% for a weekly rise of 3.9%. Platinum dropped 0.9% but gained 0.5% this week. Palladium lost 1.3% but still managed a weekly advance of 2%.

At the Comex close: April gold slid $12.10 to $1,983.80; May silver added 8 cents, to $23.34; April platinum lost $9 to $983.90; and June palladium shed $18.40 to $1,414.40 an ounce.