Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold edged down less than 0.1% to close above $3,293 as higher-than-expected inflation supported a hawkish Fed outlook, boosting the dollar and pressuring alternative stores of value. Bullion was virtually unchanged for the month, dipping 80 cents. Silver fell 1.1% today but still gained 2% this month to finish at $36.55 an ounce.

The Personal Consumption Expenditures index rose 0.3% in June, the biggest increase in four months, as the inflationary effects of tariffs began to filter into the economy. The 12-month inflation rate rose to 2.6% from 2.4% in May. Core inflation, minus food and energy, also rose 0.3% to hold at an annualized 2.8%.

The stronger inflation data underpinned the Fed's decision yesterday to hold interest rates steady despite unrelenting pressure from the White House to slash by as much as 300 basis points, something that historically occurs only during the most extreme financial crises.

The Fed's dual mandate requires it to adjust monetary policy to maintain price stability and maximize employment. The inflation rate has been drifting higher, away from its target 2%, since the so-called "liberation day" tariffs were declared in April. Tomorrow's release of the latest nonfarm payrolls data will give further clues about the health of the labor market.

The dollar rose 0.2% against major rivals as traders anticipate that the Fed, responding to inflation data and lingering trade uncertainty, will keep interest rates at current levels. The buck enjoyed its first monthly gain of the year as a flurry of trade deals instilled new confidence among Forex traders.

A stronger dollar weighs on gold and other commodities by making them pricier overseas.

Platinum lost 5.5% today and 3.7% this month. Palladium shed 2.9% but still rallied 8% in July on supply concerns out of Russia, a leading producer, because of its war against Ukraine.

At the New York spot close: gold dipped $2.60 to $3,293.20; silver shed $1.01 to $36.55; platinum fell $74.30 to $1,286.40; and palladium lost $29.20 to $1,193.55 an ounce.