Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold rose 0.5% to close above $1,784 as yields dipped after Janet Yellen retracted her comments from yesterday about higher interest rates, and key data fell short of forecasts.

Treasury Secretary Yellen "clarified" yesterday's statement that interest rates would likely have to rise to prevent the economy from overheating. The comment had scrambled the markets, spurring a retreat in equities and commodities, both of which are adversely affected by higher rates.

Today, Yellen mollified the markets by walking back that comment, asserting that she does not advocate higher rates and does not see inflation as a sustained problem for the recovery.

Two prominent Fed members joined in the chorus of comfort. Separately, Chicago Fed President Charles Evans and Boston Fed chief Eric Rosengren emphasized that achieving the Fed's goal of sustained 2% inflation will be difficult and require rates to stay low for a long time.

The Dow and S&P 500 both jumped to new intraday record highs on the reassurance that easy money will continue to flow, then retreated to modest gains as investors tracked back toward safe-haven assets.

ADP reported private payrolls added 742,000 jobs in April, the most in seven months, but fell short of forecasts projecting 800,000. Meanwhile, the ISM services survey slipped to 62.7% in April after reaching a record 63.7% in March.

Treasurys rallied mildly behind the data and Fed reassurances, pressuring yields. Lower yields, in turn, support gold by reducing the opportunity cost for holding it instead of bonds as a safe-haven asset. The dollar was virtually flat.

The other precious metals were lower, with silver dipping 0.1% while platinum and palladium bot slipped 0.2%.

At the Comex close: June gold gained $8.30 to $1,784.30; July silver slipped 4 cents to $26.52; July platinum dropped $3 to $1,228.80; and June palladium shed $4.80 to $2,972.80 an ounce.