Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold rose for a second session, adding 0.8% to close above $1,838, as weak consumer data eroded bonds yields and the dollar, lifting demand for alternative stores of value. The metal picked up 0.4% for the week to finish at its highest price since February 10.

Consumer sentiment fell to a three-month low in April, according to the University of Michigan index, with rising consumer prices causing Americans to worry about their future financial wellbeing.

Separately, retail sales were flat in April as the stimulus boost from the month before faded. March sales had risen sharply after the government sent $1,400 relief checks to most households.

With consumer spending accounting for some two-thirds of GDP, the disappointing sales and sentiment data this month signal just how dependent on fiscal support the economy remains.

Benchmark 10-year Treasury yield fell as investors became less concerned that rising prices will prompt the Fed to curtail monetary stimulus prematurely. A chorus of Fed members came forward this week to reassure the markets that interest rates will remain near zero for the foreseeable future.

Lower yields support gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar tracked lower with yields, losing 0.5% against major rivals, as the weak data lessened the likelihood of monetary tightening. A falling dollar supports gold and other commodities by making them less expensive in other currencies, lifting demand overseas.

The other precious metals were higher for the day and lower for the week. Silver gained 1.1% today but slid 0.4% this week. Palatinum was 1.4% higher for the session but 2.5% lower for the week. Palladium added 1.1% to trim its weekly loss to 1%.

At the Comex close: June gold gained $14.10 to $1,838.10; July silver rose 31 cents to $27.37; July platinum picked up $16.30 to $1,222.80; and June palladium climbed $30 to $2,894.60 an ounce.