Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold jumped 1% to close above $2,331 after soft data and dovish comments from Fed officials lifted rate-cut hopes, pressuring Treasury yields. Silver surged 3.5% to finish at $27,37 an ounce.

Friday's nonfarm payrolls report showed merely 175,000 jobs were added in April, the fewest in six months, while wages grew at the slowest pace in three years. Separately, the US services sector, which employs most Americans, fell into contraction for the first time since December 2022.

Meanwhile, after sticky inflation reports had prompted worries that the Fed may raise interest rates again, prominent Fed officials have stepped forward to reassure the markets that a rate cut, not a hike, will be the Fed's next move.

Tom Barkin of the Richmond Fed said today the economy is likely to slow in the coming months, putting downward pressure on inflation. New York Fed President John Williams said rates are good where they are and cuts are coming "eventually."

Benchmark 10-year Treasury yields retreated under 4.5% as traders speculated that soft data is likely to result in two rate cuts this year. Falling yields lift gold by decreasing the opportunity costs for holding it instead of bonds.

Rekindled Middle East uncertainty also supported the gold price. Israel is reported all but certain to invade Rafah in Gaza, raising concerns over the potential for retaliatory measures from Iran.

Platinum was nearly flat, inching down less than 0.1%, while palladium climbed 3.7%.

At the New York spot close: gold gained $22.60 to $23,331.20; silver rallied 92 cents to $27.37; platinum dipped 40 cents to $964.90; and palladium advanced $34.80 to $983.20 an ounce.