Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold dipped 0.3% to close under $1,928 as an increasingly hawkish interest rate outlook boosted yields and the dollar, pressuring alternative stores of value.

Two more officials of the Federal Reserve joined the growing chorus advocating for an aggressive tightening of monetary policy. Kansas City Fed President Esther George said half-point rate hikes at upcoming Fed meetings will "be an option" and the central bank must be "very focused" on "removing accommodation" from the economy.

Separately, Governor Lael Brainard said today that inflation is "much too high" and called for a rapid reduction in the Fed's $9 trillion balance sheet. Slated to become the next Vice Chair of the Fed, she is one of the most dovish members of the Fed's policy board, so her hawkish shift is especially notable.

Benchmark 10-year Treasury yields jumped to a three-year high above 2.55% after Brainard's speech, pressuring gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar also jumped on the hawkish rate view, adding 0.5% against major rivals. Higher rates lift the buck by attracting Forex investors seeking higher yield. A stronger dollar weighs on gold and other commodities by making them more expansive in other currencies.

Wall Street rolled back on rate concerns, with the Dow and S&P 500 dropping 0.8% and 1.3% respectively. The tech-heavy Nasdaq took the biggest hit, losing 2.3%. Higher-flying tech stocks are more sensitive to rate hikes because their cash flows are projected further into future become less attractive relative to higher-yielding assets.

The other precious metals also fell, with silver slipping 0.2% while platinum and palladium each lost 1.8%.

At the Comex close: June gold dipped $6.50 to $1,927.50; May silver dropped 6 cents to $24.53; July platinum lost $17.90 to $973.10; and June palladium fell $39.70 to $2,235.30 an ounce.