Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold dipped 0.2% to close below $1,275, then fell another $17 to $1,258 in electronic trade after the minutes from the Fed's April meeting signaled the growing likelihood of a rate hike in June.

At the FOMC meeting in April, "most" participants voiced support for a June hike if data permits, according to the minutes released today. While some policymakers were still concerned about the slowdown in growth during the first quarter, when GPD grew by 0.2%, the majority said they would be comfortable raising rates in June if growth, employment and inflation remain on track.

The April sentiment reinforces hawkish statements made recently by prominent Fed officials. In the past week, San Francisco Fed President John Williams, Atlanta Fed President Dennis Lockhart, and the New York Fed's William Dudley have warned that June remains a "live" meeting for a rate increase.

The dollar jumped after the Fed minutes, with the ICE Dollar Index adding 0.6% to reach a one-month high, as traders repositioned for the greater likelihood of higher rates. According to the CME FedWatch tool, the odds of June hike jumped to 30%, up from 20% just a few hours before the Fed minutes were published. A rising dollar weighs on gold and other commodities by making them more expensive overseas.

The other precious also closed lower and then extended losses after hours. Silver closed 0.7% lower, then lost another 0.4% after hours; platinum dropped 1.1% and then another 0.8%; and a palladium fell 0.9% and then another 0.6% after the Fed minutes.

At the Comex close: June gold dipped $2.50 to $1,274.40; July silver dropped 12 cents to 17.13; July platinum fell $12 to $1,042.50; and June palladium slid lost $5 to $579.60 an ounce.