Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.7% to close near $1,874 after core consumer inflation came in hotter than expected and the dollar weakened, boosting demand for alternative stores of value. It was the metal's best daily rise in a week.

The Consumer Price Index showed inflation rose 0.3% in April, the smallest increase in eight months, bringing the annual inflation rate down to 8.3% from 8.5% in March. Lower gasoline prices were the main reason for the smaller increase.

But the so-called core CPI, excluding food and energy prices, rose 0.6% for the biggest increase since January. Core inflation is considered "stickier," meaning higher prices are likely to be with us for a while.

Wall Street retreated on the CPI print, with the Dow slipping 0.2% while the S&P 500 dropped 0.6% and the Nasdaq 2.2%.

Benchmark 10-year Treasury yields pulled back under 3% as investors shifted away from risk into the perceive safety of government debt. Lower yields lift gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

A slightly lower dollar also lifted gold by making it less expensive in other currencies, boosting overseas demand.

Oil jumped 5.5% to more than $105 per barrel after diminishing Covid cases in China stoked optimism about returning demand in the world's second largest economy. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were mostly higher, with silver and platinum rising 0.7% and 1.5%, respectively, while palladium dropped 1.8%.

At the Comex close: June gold gained $12.70 to $1,853.70; July silver added 15 cents, to $21.58; July platinum picked up $42.60 to $989.80; and June palladium dropped $35.80 to $2,007.90 an ounce.