Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold edged up less than 0.1% to close at $1,868 after soft construction data pressured stocks, yields, and the dollar, lifting alternative assets. It was the metal's fourth straight winning session and highest finish since early January.

New home construction fell nearly 10% in April from the previous month as building supplies and labor were in short supply due to the ongoing pandemic. The deceleration in this important sector, far more than forecast, is one more signal that the recovery has entered and new and uneven phase. Retail sales and employment growth have also faltered in the past month.

US equity indexes were mostly lower after the home-building data, with the Dow and S&P 500 dropping 0.3% while the Nasdaq was essentially flat.

Treasury yields pulled back slightly, with Benchmark 10-year yields down less than a basis point, as investors shifted toward safety. Lower yields support gold by reducing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar fell 0.5% to a three-month low against major rivals as traders speculate that softer data, along with constant reassurances from Fed members, mean interest rates will remain near zero for the foreseeable future.

Low rates weigh on the dollar by making it less attractive for Forex traders seeking higher yield, lifting gold in turn by making it less expensive in other currencies, thereby fueling overseas demand.

The other precious metals were mostly higher, with silver and palladium adding 0.2% and 0.3%, respectively, while platinum fell 1.5%.

At the Comex close: June gold rose 40 cents to $1,868; July silver gained 6 cents to $28.33; July platinum lost $19.20 to $1,225.30; and June palladium added $7.20, to $2,903.10 an ounce.