Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold edged up 50 cents to close near $1,419, notching its fourth straight winning session, as soft US data quelled risk appetite and boosted alternative assets. The metal had reached a six-year peak above $1,441 in intraday trading before the Fed put a damper on aggressive rate-cut hopes, buoying the dollar and prompting traders to take profits.

Prominent Fed members pushed back on expectations the Fed will cut rates by a half-point in July. St. Louis Fed President James Bullard said the economic outlook is not dire enough for such a large rate cut, believing that a quarter-point reduction would be enough to start.

Later in the day, Fed Chair Jerome Powell resisted growing pressure for lower rates from President Trump, asserting that the central bank is "insulated from short-term political pressure" and a July rate cut is not a done deal.

The dollar swung from mild losses to mild gains after Powell's remarks, adding 0.2% against major rivals. Lower rates weaken the dollar by making it less attractive to foreign exchange investors seeking yield. In turn, a weaker dollar supports gold and other commodities by making them less expensive overseas.

The buck's early-session drop was fueled in part by soft U.S. data. Consumer confidence fell in May to its lowest level in nearly two years on growing concerns about the trade war with China and the tightening job market. New-home sales slid to a five-month low in May, with sales down nearly 8% from the previous month.

The ever-so-slightly hawkish comments from the Fed undercut gold's strong rally to an intraday high above $1,441, which had been fueled in part by exuberance over the prospect of sharply lower interest rates. CME FedWatch dropped the odds of a half-point rate cut to 32% from 42% yesterday, although a quarter-point cut is still projected to be 100%.

The other precious metals were mostly lower, with sliver and platinum down 0.5% and 0.2%, respectively, while palladium rose 0.3%.

At the Comex close: August gold edged up 50 cents to $1,418.70; July silver slid 8 cents to $15.30; July platinum dipped $1.90 to $809.80; and September palladium added $3.90, to $1,532.50 an ounce.