Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold fell 1% to close below $1,306 as President Trump announced tariffs on steel and aluminum, causing a general sell-off in commodities. The metal then rebounded strongly in electronic trade above $1,321 as trade-war fears caused stocks to crash, spurring safe-haven demand.

Following a meeting with US steel and aluminum workers, President Trump declared that he will impose hefty tariffs of 25% on steel and 10% on aluminum to support those industries. The controversial move apparently came after heavy resistance from within his administration, with critics citing the likelihood of a counterproductive trade war.

Commodities and stocks quickly sold off after the announcement on concerns that protectionist trade policies may curtail the demand for exports and raise prices, eating into corporate profits and personal income. The Dow plunged 1.5% and the S&P 500 1.2%.

The dollar initially rose 0.2%, pressuring gold, before plunging to a loss of 0.4% after Fed Chair Jerome Powell, in his second day of Congressional testimony, walked back some of his hawkish comments from the day before.

Whereas yesterday Powell warned of rising inflation, today he said the economy is in no danger of overheating, and ongoing slack in the labor market will allow wages to rise without spurring higher consumer prices. His latest comments lowered the likelihood of four rate hikes this year to less than 25% from 34% earlier this week, according to CME FedWatch.

Tracking with gold's after-hours rebound on safe-haven demand, 10-year Treasury notes rallied to the highest level in six months as investors sought safety.

The other precious metals also finished lower and then rose after hours. Silver dropped 0.8% but then rallied to a gain of nearly 0.3%. Platinum fell 3.1% before shaving its loss to 2.2%. Palladium plunged 6.2% and then reduced its loss to 5.2% after hours.

At the Comex close: April gold fell $12.70 to $1,305.20; May silver lost 13 cents to $16.28; April platinum shed $27.20 to $957.80; and June palladium plummeted $60.90 to $973.20 an ounce.