Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold jumped 0.9% to close near $1,748 as sharply higher consumer prices stoked demand for the metal in its traditional role as a hedge against inflation.

The Consumer Price Index surged 0.6% in March, its fourth straight monthly rise, to push the yearly inflation rate to 2.6%, the highest since the fall of 2018. The so-called core inflation rate, stripping out volatile food and energy costs, rose a more modest 0.3%.

Treasury yields pulled back despite the strong CPI as traders seem to be taking to heart the Fed's repeated pledges to leave interest rates near zero for years to come despite higher inflation. Weaker yields support gold by reducing the opportunity cost for holding it instead of bonds as a safe-haven asset.

As if on cue, Philly Fed President said today that the Fed does not expect the economy to overheat and produce runaway inflation. Reinforcing recent statements by Fed Chair Jerome Powell and other FOMC members, Harker said the Fed will keep continue to stimulate the recovery with easy money policies.

Anticipation of premature tightening had been a primary driver of higher yields over the past two months, weighing on gold. This sentiment appears to be changing.

Tracking with lower with yields, the dollar fell 0.3% to a three-week low against major rivals, lifting gold and other commodities priced in it for global trade by making them less expensive in other currencies.

The other precious metals were mostly higher, with silver and palladium rising 2.3% and 0.9%, respectively, while platinum slid 1.5%.

At the Comex close: June gold jumped $14.90 to $1,747.60; May silver climbed 56 cents to $25.43; July platinum dropped $17.70 to $1,157.10; and June palladium picked up $25 to $2,696.90 an ounce.