Daily Gold Update

Source:Dana Samuelson, American Gold Exchange

Austin— Gold fell $12.80, just over 1%, to close the New York session at $1,253.30 following the release of the new Atlanta Fed GDP Now estimate for the 2nd quarter of 2017, which was estimated at a blistering 4.3%. Over 10,000 Comex June gold contracts traded hands following the release of the new 2nd quarter GDP estimate, pushing gold below its 200-day moving average at $1,259, to as low as $1,252.90 before rebounding slightly. Trading in all markets was thin with several markets closed in Asia and Europe for the May day holiday.

On January 1, 2017 the Atlanta Fed GDP Now estimated 1st quarter 2017 GDP at 2.9%. This past Friday the official GDP for the first quarter of 2017 was released at a meager 0.7%, the weakest pace in 3 years. If the U.S. economy were to expand in Q2 of 2017 at 4.3%, this would be the strongest growth since Q3 of 2014, and would have hawkish policy indications for future Fed rate hikes. Higher interest rates would buoy the U.S. dollar and inversely pressure gold. While the Fed does meet this week, odds are only 5% that the Fed will raise interest rates at the conclusion of their meeting on Wednesday. Instead, odds are 70% in favor of a rate hike at the conclusion of their June meeting on June 14th.

Silver, platinum and palladium all followed gold lower in price.

At the Comex close: June gold fell $12.80 to $1,255.50; July silver fell 42 cents to 16.84; July platinum fell $16.50 to $932.20; and June palladium fell $12.20 to $814.45 an ounce.