Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold edged up slightly to close near $1,729 as Treasury yields and the dollar pulled back despite upbeat US economic data and sharply higher equities, lifting alternative stores of value. It was the metal's third straight winning session.

The US services sector accelerated at the fastest pace in 40 years in March, with the ISM non-manufacturing index hitting a record high near 64. Service industries comprise two-thirds of the US economy. Every category posted growth, with the strongest gains coming in restaurants, hospitality, and travel.

Coming after stellar recent reports on jobs, manufacturing, and consumer confidence, the services data signal an economy on the rebound behind accelerating vaccinations and stimulus support.

Wall Street cheered the news, with the Dow and S&P 500 jumping 1.1% and 1.4% respectively, to new record highs. The tech-heavy Nasdaq was even hotter, adding 1.6%

Despite the sharp rise in risk sentiment, Treasury yields retreated as traders reconsidered their recent bets that rising inflationary pressures will cause the Fed to accelerate rates hikes. Falling yields support gold by decreasing the opportunity cost for holding it instead of bonds and a safe-haven asset.

While the flood of stimulus money from President Biden's $1.9 trillion aid package and ongoing quantitative easing are likely to stoke inflation along with economic growth, the Fed has remained steadfast in pledging no rate hikes through 2023 even if inflation charges above its 2% target.

The dollar slipped with yields, further supporting gold by making it less expensive overseas.

Sharply lower oil prices limited gold's rise, with WTI crude tumbling more than 5% on OPEC production hikes. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were mixed, with silver and palladium sliding 0.7% and less than 0.1%, respectively, while platinum added 0.1%.

At the Comex close: June gold edged up 40 cents to $1,728.80; May silver dropped 17 cents to $24.78; July platinum picked up $1.20 to $1,209.80; and June palladium dipped $1.10 to $2,654.70 an ounce.