Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold dipped 0.2% to close under $1,778 after upbeat economic data in the US and Europe stoked risk appetite, undercutting demand for alternative assets. The metal edged down 0.1% for the week.

The Markit US composite PMI jumped to a record high of 62.2 in April, where anything over 50 signals expansion. Both services and manufacturing accelerated by more than expected despite rising prices and ongoing supply-chain disruptions caused by Covid-19.

Separately, new home sales rocketed higher in March at the fastest pace in 15 years, with month-over-month sales climbing more than 20%. Supply remains the biggest limiting factor in the crucial housing market, making homebuilders confident that demand for new homes will continue throughout the year.

Wall Street cheered the data, with the Dow and S&P 500 rising 0.7% and 1.1%, respectively, while the Nasdaq surged 1.4%.

Treasury yields ticked up as investors shifted from bonds to stocks. Higher yields are a headwind for gold because they increase the opportunity cost for holding it instead of bonds as a safe-haven asset.

Limiting gold's slide, the dollar fell 0.5% to a seven-week low as the euro rallied behind strong EU data. The IHS Markit eurozone composite index rose in April, posting two months of expansion, while accelerating vaccinations in Germany and France boost hopes that the region will rebound economically this summer.

A weaker dollar supports gold and other commodities priced in it for global trade by making the m less expensive in other currencies, lifting overseas demand.

The other precious metals were mixed for the day and week. Silver dropped 0.4% for a weekly loss of 0.1%. Platinum rose 2% for the day and week. Palladium added 0.5% for the day and 3% for the week.

At the Comex close: June delivery dipped $4.20 to $1,777.80; May silver slipped 11 cents to $26.08; July palladium added $24.60, to $1,233.10; and June palladium climbed $14.10 to $2,857 an ounce, another record.