Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.8% to close at $1,743 as yields and the dollar retreated further, boosting the allure of alternative stores of value. It was the metal's fourth straight winning session.

The IMF raised its global economic projection to 6% this year, with the US growing at 6.4% as vaccine rollouts accelerate and more businesses reopen and hire. While the outlook remains uncertain because of the pandemic, accommodative monetary policies from global central banks, especially the Fed, figure heavily in the IMF forecasts.

Yields on US Treasury notes receded again, with the benchmark 10-year yield dropping below 1.7%, as bond traders continue to back away from expectations that the Fed will raise interest rates ahead of schedule because of inflation. Fed members have been aggressive recently in reassuring the markets that interest rates will stay near-zero through 2023.

Falling treasury yields support gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset and long-term store of value. The speculative run-up in yields last quarter was a primary driver behind the correction in gold prices.

The dollar fell with yields, losing 0.3% to hit a two-week low against major rivals. A weaker dollar supports gold and other commodities priced in it for global trade by decreasing their cost in other currencies, lifting overseas demand.

The other precious metals were also higher, with silver jumping 1.8% while platinum and palladium added 2.5% and 1.3%, respectively.

At the Comex close: June gold gained $14.20 to $1,743; May silver jumped 45 cents to $25.23; July platinum climbed $30.70 to $1,240.50; and June palladium added $35.50 to $2,690.20 an ounce.