Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinExtending yesterday's 1.3% surge, gold added another 0.1% to close near $1,964 after weak wholesale inflation reinforced expectations that the Fed's rate-hike cycle will soon end. It was the metal's highest finish in a month.

The producer price index edged up just 0.1% in June, less than forecast, and the annual rate decelerated from 1.1% in May to a mere 0.1%. It is the lowest annual reading since September 2020. The core rate, minus food and energy costs, also increased 0.1% in June while the annual rate fell to 2.6%. Wholesale inflation is often a reliable indicator of future trends in consumer inflation.

Benchmark 10-year Treasury yields reed further to less than 3.8% as traders increasingly bet that the Fed will hike rates once more this month and be done. Falling yields support gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar fell sharply for a second day on the shifting rate view, losing 0.7% to hit a one-year low against major rivals. A weaker dollar lifts gold and other commodities by making them cheaper in other currencies, boosting demand overseas.

The other precious metals were also higher, with silver jumping 2.6% while platinum rose 2.8% and palladium picked up 0.9%.

At the Comex close: August gold gained $2.10 to $1,963.80 September; silver rose 64 cents to $24.95; October platinum climbed $26.80 to $983.40; and September palladium picked up $12 to $1,291.80 an ounce.