Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold eased 0.4% to close under $1,985 as optimism over the debt-ceiling and upbeat data rallied stocks and lifted yields and the dollar, pressuring alternative assets. It was the metal's lowest finish in seven weeks.

In a speech at the White House, President Biden expressed optimism about reaching a bi-partisan agreement on the debt-ceiling, saying he was "confident" that the US will not default on its obligations.

Wall Street ran with the news, with all three major indexes rallying around 1.2%. Upbeat recent US economic data also fueled risk-appetite, pulling investors away from safe-haven assets like gold and bonds.

New home construction rose 2.2% last month as builders continue seeing strong demand. The solid data follows yesterday's reports that retail sales and industrial output rose more than forecast in April.

Benchmark 10-year Treasury yields pushed higher with rising risk sentiment, pressuring gold by increasing the opportunity cost for holding it instead of bonds.

The dollar rose 0.3% to a seven-week high as traders expect the resurgent economy to complicate the Fed's decision on interest rates. The odds of another rate hike in June have risen to 22% from zero a week ago, according to Fed fund futures trading. A stronger dollar weighs on gold by making it pricier overseas.

The other precious metals were mixed. Platinum added 1.5% while palladium lost 1% and silver was virtually flat.

At the Comex close: June gold dropped $8.10 to $1,984.90; July silver was virtually unchanged at $23.90; July platinum rose $15.70 to $1,082.60; and June palladium dropped $14.70 to $1,484.90 an ounce.