Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.5% to close near $2,014 after the IMF forecast weak global growth and the dollar retreated ahead of tomorrow's CPI release, lifting alternative stores of value. It was the metal's sixth straight finish above $2,000 an ounce.

The IMF warned today that the US and global economies will struggle over the next few years under the combined pressures of elevated inflation and high interest rates. Predicting inflation won’t return to pre-pandemic levels until 2025, the fund projects US growth at 1.6% this year and 1.1% in 2024.

The combination of sticky inflation and slower growth is seen as bullish for gold in its twinned roles as inflation hedge and safe-haven asset, especially if the Fed reduces interest rates later this year, as expected, to stave off a recession.

In another sign of a cooling economy, US corporate bankruptcies climbed in March to the highest level in three years, fueled in part by the collapse of SVB and other banks, and the ensuing credit crunch.

The dollar fell 0.4% against major rivals led by the euro and yen as traders hedged their positions ahead of tomorrow's widely anticipated release of the consumer price index for March. A falling dollar supports gold and other commodities by making them cheaper in other currencies.

While a strong CPI could make the Fed more hawkish in upcoming policy meetings, Fed fund futures traders have priced-in a 70% likelihood that the central bakers will hike by a quarter-point in May and be done. The market further expects the Fed to cut rates by 25 to 50 basis points by November.

Benchmark 10-year yields were essentially flat.

The other precious metals were also higher, with silver adding 0.5% while platinum and palladium picked up 0.4% and 2%, respectively.

At the Comex close: June gold gained $9.90 to $2,013.70; May silver added 12 cents, to $25.04; July platinum picked up $4.30 to $1,007.20; and June palladium climbed $28.40 to $1,436 an ounce.