Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold jumped 1.4% to close above $1,976 as sharply higher consumer inflation and oil prices boosted demand for alternative stores of value. It was the metal's fourth straight winning session and highest finish in a month.

The Consumer Price Index rose 1.2% in March, the biggest monthly climb since Hurricane Katrina in 2005, lifting the 12-month rate to 8.5%, the most since 1982. Much higher gasoline and food costs, due in part to Russia's war on Ukraine, were the main drivers.

The so-called core CPI, excluding volatile food and fuel prices, rose a reasonable 0.3% to 6.5% over the past 12 months, which was still the highest in 40 years.

Benchmark 10-year Treasury yields retreated to 2.7% after the CPI print as analysts speculated that the relatively muted rise in core prices may signal inflation has reached its peak. Falling yields support gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Fed Governor Lael Brainard, who is widely expected to become the central bank's Vice Chair, applauded the moderation in core inflation but warned that the Fed is still on track to raise interest rates and begin slashing its balance sheet in coming months.

Also lifting gold, crude prices surged 6.4% to retake $100 per barrel after China lifted some lockdown regulations on Shanghai, a step toward economic normalcy in the world's most populous nation after its zero-tolerance response to the surging pandemic. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

Capping gold's rise, the dollar added 0.4% against major rivals following Brainard's reassurances about tighter monetary policy. Higher rates lift the buck by attracting Forex investment seeking higher yield, weighing on gold in turn by making it pricier in other currencies.

The other precious metals were mixed, with silver adding 3% while platinum and palladium fell 0.6% and 2.6%, respectively.

At the Comex close: June gold jumped $27.90 to $1,976.10; May silver climbed 75 cents to $25.74; July platinum slipped $5.40 to $972.40; and June palladium shed $62.50 to $2,354.30 an ounce.