Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.3% to close above $1,254 as oil prices climbed again and a sharp rally in the euro pressured the dollar, boosting demand for alternative store of value. The metal fell 3.8% in June and 5.5% in the second quarter, pressured by the dollar's strongest quarter since late 2016.

The dollar fell 0.7% against major rivals, including a 1% drop against the euro, after the EU came to an agreement on immigration. The refugee crisis engulfing Europe had threatened to unseat Germany's Chancellor Angela Merkel and perhaps undermine the viability of the euro and EU itself.

Despite today's retreat, the dollar rallied nearly 5% in the second quarter, propelled behind tighter Fed rate policies, disappointing European economic data, and general weakness in rival currencies. The euro, meanwhile, fell 5.5%. A stronger dollar typically pressured god and other commodities priced in it for global trade by making them more expensive in other currencies.

Oil rose for the fourth session as West Texas Intermediate Crude picked up 1% to close above $74 per barrel, nearing a four-year high. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The Fed's preferred measure of inflation, the PCE index, rose 0.2% in May to reach 2.3% over the past 12 months. The core PCE, stripping out volatile food and energy costs, hit 2% for the first time in more than six years. Higher inflation may pressure gold in the short term by spurring the Fed to raise interest rates but should be bullish in the longer-term as investors seek ways to preserve purchasing power.

The other precious metals were higher for the day but lower for the month. Silver added 1% but fell 1.8% in June. Platinum picked up 0.3% on the day but fell 5.8% this month. Palladium jumped 2.2% today but still lost 3.6% this month.

At the Comex close: August gold gained $3.50 to $1,254.50; September silver climbed 16 cents to $16.20; October platinum added $2.50, to $857.70; and September palladium jumped $20 to $950.90 an ounce.