Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.5% to close above $1,852 as global growth and inflation concerns pressured yields and lifted safe-haven assets.

The World Bank slashed its global growth forecast for 2022 to 2.9%, nearly one-third lower than its previous forecast, citing the combined effects of the Ukraine war, pandemic lockdowns, supply chain disruptions, and climbing prices for food and energy.

Acknowledging that many countries are now facing recession, World Bank President David Malpass warned that stagflation, “a protracted period of feeble growth and elevated inflation,” has become a real possibility for the first time since the 1970s.

Treasury Secretary Janet Yellen, testifying before the Senate Finance Committee, acknowledged that inflation is likely to remain high for longer than expected. Yellen, too, cited elevated food and energy prices because of the Ukraine war, along with Covid-related shifts in consumption from services to goods.

The Atlanta Fed lowered its real GDP forecast for the second quarter to 0.9% from 1.4% a week ago.

Benchmark 10-year Treasury yields receded under 3% as investors shifted back toward the perceived safety of government debt. Falling yields lift gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar slipped 0.2% against major rivals, boosting gold and other commodities priced in it for global trade by making them less expensive in other currencies.

The buck’s loss came despite rising to a 20-year high against the yen after Bank of Japan Governor Haruhiko Kuroda confirmed the BOJ’s commitment to quantitative easing, saying a weak yen is good for Japan.

The other precious metals were mixed, with silver rising 0.4% while platinum and palladium lost 1.7% and 1.5%, respectively.

At the Comex close: August gold gained $8.40 to $1,852.10; July silver added 9 cents, to $22.18; July platinum dropped $17.10 to $1,012.90; and September palladium shed $30.70 to $1,965.40 an ounce.