Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold fell 1.1% to close at a one-month low of $1,324 as upbeat economic data and rising bond yields rallied the dollar, damping demand for alternative stores of value.

The Markit flash PMI showed manufacturing expanded in April at the fastest pace in three years, signaling that the US economy may be waking from its winter slumber. The cost of raw materials rose at the fastest pace in five years.

The Conference Board forecasts GDP growth of 3.4% in the second quarter after a meager 1.9% in Q1. However, protectionist trade policies and sharply higher inflation could become a headwind for further expansion.

Existing home sales rose 1.1% in March, down only slightly from a year ago despite extremely limited inventory and rising mortgage rates.

Benchmark 10-year Treasury yields crept closer to the psychologically-important 3% mark as traders speculate that burgeoning inflation and hotter growth will prompt the Fed to accelerate the pace of interest rate increases. CME FedWatch, which forecasts rates based on Fed futures trading, sees a 40% change of four hikes this year, up from 33% one week ago.

The dollar extended its streak to five sessions, adding another 0.6% to reach a three-month high behind rising Treasury yields and rate view. A stronger dollar pressures gold and other commodities priced in it for global trade by making them more expensive overseas. The buck remains down nearly 1% for the year, however, after dropping around 10% in 2017.

The other precious metals were also lower, with silver plunging 3.4% while platinum and palladium lost 1% and 4.9%, respectively.

At the Comex close: June gold fell $14.30 to $1,324; May silver plunged 58 cents to $16.59; July platinum dropped $9.40 to $922.40; June palladium shed $50.65 to $979.55 an ounce.