Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.5% to close near $1,313 as the dollar fell on the Fed's dovish rate view, boosting demand for alternative stores of value.

Yesterday's post-meeting statement from the Federal Reserve, while acknowledging rising inflation, tamped down expectations that the central bank will raise interest rates four times this year. A rise in wholesale and consumer prices had caused traders to speculate in recent weeks that the Fed could hike four times this year, one more than advertised in its earlier forward guidance.

The dollar lost 0.4% against major rivals on the shifting rate view, boosting gold and other commodities prices in it for international trade by making them less expensive overseas. Often purchased as a hedge against rising inflation, gold also received support from new data showing unit labor costs jumped 2.7% in the first quarter, well-above the 1.1% average over the past year.

Other economic reports had negligible effect on gold and the dollar. The ISM nonmanufacturing index fell to a four-month low in April, while the Commerce Department said factory orders rose 1.6% in March. And US productivity edged up 0.7% in Q1 but remains weak by historic standards.

The other precious metals were mostly higher, with silver and platinum rising 0.4% and 1.1%, respectively, while palladium slipped 0.2%.

At the Comex close: June gold gained $7.10 to $1,312.70; July silver added 7 cents, to $16.45; July platinum climbed $10.20 to $904; and June palladium dipped $1.45 to $958.70 an ounce.