Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold fell 2.4% to close at $2,335 as upbeat US economic data combined with hawkish Fed minutes to dim the outlook for rate cuts. After hitting a new record high on Monday, the metal suffered its third straight down session and lowest finish in more than a week. Silver shed 3.2% to finish at $30.28 an ounce.

SandP Global reported the economy picked up speed in May. The flash PMI for services accelerated to an 11-month high of 54.8 while manufacturing rose to nearly 51. Any reading above 50 indicates expansion.

Separately, first-time jobless claims fell for a second straight week to 215,000, signaling ongoing strength in the labor market despite high inflation and interest rates.

The unexpectedly strong data came one day after the minutes from the Feds last meeting indicated a willingness among various officials to raise interest rates should risks to inflation materialize.

Benchmark 10-year Treasury yields jumped to nearly 4.5% as investors speculated that the Fed may be more inclined to hold interest higher for longer or even increase them. Higher yields weigh on gold by increasing the opportunity cost for holding it instead of bonds.

Fed fund futures traders have dropped the odds of a September rate cut to 51%, down from 58% yesterday and 67% one week ago.

Platinum and palladium fell 1.8% and 2.9%, respectively.

At the New York spot close: gold tumbled $57.90; silver shed $1.01; platinum slid $19.30 to $1,030.40; and palladium lost $29.60 to $974.20 an ounce.