Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold rallied 1.1% to close near $1,982 after dovish comments from Fed Chair Powell and worries about regional banks pressured the dollar, boosting alternative stores of value. The metal still dropped 1.9% for the week, the most in three months.

Jerome Powell said today that interest rates "may not need to rise as much" as many market participants think because tighter credit conditions are doing much of the Fed's work for it. The statement ran counter to the hawkish comments from several regional Fed officials this week that helped rally the dollar and pressure gold.

Lending conditions have tightened in the wake of high-profile bank failures driven in large part by aggressive rate hikes over the past year. Regional banks have also come under pressure, raising the specter of even tighter credit and a slower economy.

Treasury Secretary Janet Yellen reportedly told the CEOs of large banks like JPMorgan and Citibank that more mergers with smaller regional banks will be necessary to weather the recent instability in the sector.

Separately, negotiations on the debt ceiling stalled with both parties still far apart. Optimism from earlier in the week, which helped to lift yields and the dollar and gold's expense, has apparently given way to intransigence on both sides of the aisle at the risk of default come June.

The dollar fell 0.4% as traders speculated that the Fed will be more likely to pause interest rates at its June meeting. According to CME Fedwatch, the odds of a June rate hike fell from 36% yesterday to 18% today, while the likelihood of a pause rose to nearly 82% from 64% in the same span.

A weaker dollar supports gold and other commodities by making them less expensive in other currencies, boosting overseas demand.

The other precious metals were higher for the day and mixed for the week. Silver rose 1.8% but slipped 0.4% this week. Platinum picked up 1.7% for a weekly win of 0.8%. Palladium jumped 5.1% for a weekly rise of 0.7%.

At the Comex close: June gold rose $21.80 to $1,981.60; July silver climbed 43 cents to $24.06; July platinum picked up $17.50 to $1,075.70; and June palladium surged $73.60 to $1,523.80 an ounce.