Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold soared 1.8% to close near $1,767 as upbeat US economic data lifted inflation expectations while bonds yields declined, prompting investors to seek hedges against rising prices. It was the metal's highest finish since late February.

US retail sales skyrocketed by nearly 10% in March, far more than forecast, as vaccinations and the improving labor market gave Americans the confidence to go out and spend. The arrival of stimulus checks and extended jobless benefits helped by putting cash into people's hands.

First-time unemployment filings tumbled by 193,000 last week to 576,000, the lowest level of the pandemic. Another 132,000 filed through temporary federal programs, also a pandemic low.

Wall Street jumped on the good news, with the Dow and S&P 500 adding around 1% to reach new all-tech highs while the Nasdaq rose 1.3%.

Treasury yields rolled back again despite the rising risk sentiment. Typically, risk appetite prompts investors to sell bonds to finance equity purchases, lifting yields. At the same time, strong economic growth often raises inflation expectations, spurring traders to demand more for tying up cash for extended periods, further raising yields.

But traders have apparently taken to heart the Fed's repeated assurances that rates will remain near zero for years to come despite higher prices for goods and services. The combination of rising inflation and near-zero interest rates is bullish for gold, which thrives as an inflation hedge when it does not have to compete with rising bond yields.

Oil rose for a fourth session, with WTI crude adding to 0.5% to reach a month-high near $63.50 per barrel on rising demand and diminishing US reserve stockpiles. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were also higher. Silver rose 1.7% while platinum and palladium climbed 1.9% and 2.2%, respectively.

At the Comex close: June gold soared $30.50 to $1,766.80; May silver jumped 44 cents to $25.96; July platinum rose $22.80 to $1,200.20; June palladium added $60, to $2,739.40 an ounce.