Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.3% to close at a one-week high above $1,783 after reassurances about interest rates from Jerome Powell weakened the dollar and boosted demand for alternative stores of value. The metal hit an intraday high above $1,795 before sliding back on profit-taking.

Testifying yesterday before members of Congress, the Fed Chair maintained his dovish stance that sharply higher inflation is transitory and will not push the central bank to tighten monetary policy prematurely.

Prices have been rising due to a "perfect storm" of increased demand for goods and services, Powell asserted, while supply-chains remain bottlenecked by the persistence of the pandemic worldwide. As supplies return to normal, inflation will sink back towards the Fed's 2% target "on their own."

The dollar had rallied to more than a two-month high last week, pressuring gold, after a majority of FOMC members moved up their forecasts for raising rates to 2023 from 2014 because of high inflation.

The buck slid 0.3% early in the session as traders moderated their outlook for rate hikes. Higher rates tend to attract Forex investment seeking higher yields, bidding up the currency. A weaker dollar supports gold and other commodities by making them less expensive overseas.

Gold also caught renewed interest as an inflation hedge after IHS Markit's PMI surveys showed bother the manufacturing and services sectors are on fire this month, driving prices up. The factory gauge rose to an all-time high while services slipped slightly from last month's record but remained extremely robust.

The other precious metals were also higher, with silver climbing 1% while platinum and palladium added 1.5% and 2.8%, respectively.

At the Comex close: August gold gained $6 to $1,783.40; July silver added 25 cents, to $26.11; July platinum rose $16.30 to $1,086.50; and September palladium jumped $71.60 to $2,630.50 an ounce.