Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gold fell 1.6% to close at a seven-week low under $1,229 as yesterday's hawkish Fed statement and easing fears about Frances presidential runoff election reduced demand for safe havens.

The Fed left interest rates unchanged yesterday while issuing a policy statement that expressed confidence in the economy and dismissed weak first-quarter growth as "transitory." Traders took the Fed as implying that a June hike is on the table, and probably another in September.

Rising interest rates typically boost the dollar by attracting foreign exchange investment seeking higher yield. In turn, a stronger dollar pressures gold and other commodities denominated in it for international trade by making them more expensive overseas.

Gold came under further pressure as a strong showing by moderate French candidate Emmanuel Macron in a presidential debate against hard-right Marine Le Pen helped to ease concerns in Europe that Frexit is near. Le Pen has vowed to lead France out of the EU if elected, which would radically destabilize the region's economy and out the EU itself at risk.

U.S. Treasury prices fell with demand for safe-haven assets.

The other precious metals were mixed, with silver dropping 1.5% while platinum and palladium rose 0.4% and 0.2%, respectively.

At the Comex close: June gold fell $19.90 to $1,228.60; July silver dropped 24 cents to $16.30; July platinum added $3.62, to $907.70; and June palladium picked up $1.60, to $800.65 an ounce.