Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold fell 1.2% to close under $1,959 as Treasury yields tracked higher following rate hikes by Canada and Australia, pressuring alternative assets. It was the metal's lowest finish in a week.

The Bank of Canada unexpectedly raised interest rates by a quarter-point to 4.75%, the highest level since 2001. The move came one day after a similar increase by the Reserve Bank of Australia, which lifted rates to an 11-year high and warned of more to come.

Back in March, the BOC became the first major central bank to pause rate hikes. But inflation has proven stickier than anticipated, forcing the central bank to reassess and resume tightening. The Fed is wary of duplicating this stop and start, leading analysts to believe the US bankers may hold a hawkish stance for longer.

Benchmark 10-year Treasury yields rose back near 3.8%, pressuring gold by increasing the opportunity cost for holding instead of bonds as a safe-haven asset.

The dollar edged slightly higher against major rivals led by Canadian and Australian dollars. A stronger dollar creates headwinds for gold and other commodities by making them pricier in other currencies.

Also weighing on the metal, China's exports tumbled in May because of falling global demand for goods, especially in developed markets. A softening economy may mean decreased retail demand for gold in the world's largest gold-consuming nation.

The other precious metals were also lower, with silver sliding 0.6% while platinum and palladium dropped 1.4% and 1.7%, respectively.

At the Comex close: August gold dropped $23.10 to $1,958.40; July silver slid 14 cents to $23.53; July platinum shed $14.10 to $1,024.60; and September palladium fell $23.90 to $1,387.90 an ounce.