Daily Gold Update

Source:Dana Samuelson, American Gold Exchange

AustinPrecious metals skidded lower today, trading inversely to the U.S. dollar as the greenback continued to strengthen against other major currencies.

Since moving above 91.0 on the U.S. dollar index last Wednesday, the dollar has continued to grind higher, setting a new short-term high of 92.57 this morning. This is the first time the dollar index has been positive since early January. Recent signs of weakening growth momentum in Europe helped push the dollar higher in the last week. Fueling the dollar's rise overnight was the announcement that the White House would grant the EU a 30-day extension on today's expected tariff increase of 25% on steel and 10% on aluminum. Exemptions for Canada and Mexico are set to run until June 1st as well.

The Fed meets today and tomorrow. While few anticipate that there will be another interest rate hike at the conclusion of their meeting tomorrow, conjecture is rising that the Fed will telegraph their intention to raise rates an additional three times this year instead of the previously announced two rate hikes. Inflation continues to percolate higher. The personal consumption expenditure inflation gauge (PCE) hit the Fed's 2% annual target yesterday for the first time in a year. The ISM manufacturing index fell to 57.3% last month, which is a modest contraction from 59.3% last December. Complaints that rising costs for wages and raw materials were underpinned by the prices paid index, which rose to its highest level since 2011. This buoyed rising inflation expectations going forward.

At the Comex close: June gold skidded $12.40 to $1,306.80; July silver fell 27 to $16.13; July platinum dropped $10.2 to $894.20; and June palladium plummeted $24.305 to $936.25 an ounce.