Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold edged down 0.1% to close at $2,324.50 as yields and the dollar crept higher ahead of key data releases later this week. Silver was nearly flat at $27.35 an ounce.

With much of the risk premium from the Israel-Iran conflict largely drained from the market, investors are awaiting tomorrow's release of GDP figures for the first quarter and Friday's personal consumption index for additional direction on interest rates.

Most forecasts expect GDP to have risen by around 2.2% in Q1, driven by continued strength in consumer spending at around 3%. It would be the seventh consecutive quarter of growth above 2%, the longest streak in 20 years.

The PCE index, the Fed's preferred inflation gauge, is projected to increase 0.3% in March, which is slightly less than the CPI of 0.4% for that month. But the annual inflation rate is expected to climb to 2.6% from 2.4% the month before.

Fed fund futures traders put the odds of an initial quarter-point rate cut in September at 71%. But if data comes in stronger than forecasts, the Fed could well decide to postpone rate cuts. Weaker GDP and cooler inflation, on the other hand, could increase the likelihood that lower rates will arrive sooner.

Benchmark 10-year Treasury yields jumped above 4.65%, hovering near the highest levels this year, on expectations that the data will encourage the Fed to delay cuts. Higher yields weigh on gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Tracking higher with yield the dollar added 0.2% against major rivals, pressuring gold and other commodities by making them pricier in other currencies.

Irrespective of interest rates, gold remains strongly supported by near-record buying by global central banks, the uncertain US political landscape during an important election year, and ongoing geopolitical conflict.

Platinum and palladium slid 0.7% and 1.8%, respectively.

At the New York spot close: gold dipped $3,.20 to $2,324.50; silver slipped 2 cents to $27.35; platinum slid $6.40 to $908.70; and palladium shed $18.50 to $1,008.30 an ounce.