Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold dipped 0.2% to close under $1,816 after inflation worries sparked a selloff on Wall Street, lifting the dollar and pressuring alternative stores of value.

Weak quarterly earnings among major US retailers confirmed that rampant inflation is starting to erode corporate profits. Big box retailers like Target and Walmart acknowledged that they are under pricing pressure due to sky-high fuel and employment costs.

A recent poll CNBC-Momentiv found that more than half of Americans have cut back on dining out and driving and cancelled a monthly subscription because of rising prices. Most expect to pare spending further as if inflation stays high.

And a survey of manufacturers by the Philly Fed showed future business expectations fell to the lowest since the Great Recession in 2008, with 85% pointing to higher prices weighing on demand and profits.

US equities fell sharply on the dual prospects of higher prices and lower profits, with retailers leading the losses. The Dow lost 3.5% while the S&P 500 dropped nearly 4% and the Nasdaq 4.4%.

Benchmark 10-year Treasury yields pulled back as investors eschewed risk for the perceived safety of government debt. Higher yields weigh on gold by increasing the opportunity cost for holding it instead of bonds as a haven asset.

The dollar rose 0.5% against major rivals, bouncing after yesterday's 1% drop as Forex traders speculated that the Fed may need to be even more aggressive in tightening monetary policy. A stronger dollar pressures gold and other commodities by making them pricier overseas.

The other precious metals were also lower, with silver dropping 1% while platinum and palladium lost 2% each.

At the Comex close: June dipped $3 to $1,815.90; July silver dropped 21 cents to $21.54; July platinum lost $10 to $924.40; and June palladium shed $39.60 to $1,992.60 an ounce.