Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold climbed 1% to close at a two-week high above $1,865 as slowing US growth pressured equities and the dollar, lifting alternative stores of value. It was the metal's fourth straight day of gains.

US economic activity grew in May at the slowest pace in several months, hampered by rampant inflation, supply shortages, and weakening consumer demand. The S&P flash services index and the separate manufacturing index both fell to three-month lows, with new orders rising at the slowest rate in 21 months.

The previously hot housing market also slowed further, with new homes sales plunging to the lowest levels since the pandemic in April. It was the fourth straight month of decline

Atlanta Fed President Earl Bostic sounded a note of alarm about the Fed's aggressive tightening of monetary policy into a slowing economy. "Uncertainties shroud the economic outlook on virtually every front," Bostic warned in an essay, and the central bank should "proceed carefully in tightening policy.”

US equity markets retreated after the dour data, with the Dow edging down 0.2% while the S&P 500 and Nasdaq shed 1.1% and 2.7%, respectively.

Benchmark 10-year Treasury yields pulled back under 2.8% as investors shifted into the perceived safety of government debt. Falling yields support gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar tracked lower with yields, losing another 0.3% against major rivals on dimming outlook for US growth. The prospect of higher interest rates in the eurozone also weighed on the buck by lifting the euro after ECB President Christine Lagarde projected at lest one hike by August with more likely thereafter.

A weaker dollar supports gold and other commodities priced in it for global trade by making them cheaper in other currencies, boosting overseas demand.

The other precious metals were mostly higher, with silver and palladium jumping 1.6% and 1.4%, respectively, while platinum slid 0.8%.

At the Comex close: June gold climbed $17.60 to $1,865.40; July silver rose 34 cents to $22.06; July platinum dropped $7.40 to $942.90; and June palladium picked up $19.90 to $1,986.60 an ounce.