Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slid 1% to close under $1,818 as a rebound in the dollar prompted traders to take profits despite higher inflation readings, mixed consumer data, and falling Treasury yields. The metal still finished the week 0.9% higher for a July gain of 2.6%, its third monthly rise in the past four.

The Fed's preferred measure of inflation, the Personal Consumption Expenditures index, soared another 0.5% in June. While slightly less than forecast, the jump kept the annualized inflation rate above 4%, the highest in 13 years.

In its post-meeting statement this week, the Fed acknowledged the high rate of inflation but continued to dismiss it as the temporary effect of Covid-related blockages in supply lines and pent-up demand from closures. The Fed's dovish message helped rally gold this week to a five-week high at $1,836 on Thursday.

Adding to inflationary pressure, consumer spending rose a solid 1% in June, according to government data, as Americans spent freely on travel and other services. Consumer sentiment declined in July, however, with worries about inflation casting a shadow over how the economy was viewed in the University of Michigan survey.

The dollar rebounded 0.3% on speculation that the Fed might accelerate the timeline for rate hikes because of persistent inflation and higher spending. But the buck was still down 0.8% for the week, lifting gold and other commodities priced in it for global trade by making them cheaper overseas.

Stemming gold's decline, benchmark 10-year Treasury yields pulled back again, notching the biggest one-month drop in more than a year as the aggressive spread of the delta Covid variant causes concern about the recovery. Lower Treasury yields support gold by reducing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The other precious metals were mixed on the day but lower for the month. Silver dropped 0.9% today and 2.5% this month despite a weekly rise of 1.2%. Platinum was down 1.8% today and 2.3% this month. Palladium rose 0.5% for the session but fell 4.4% for the month.

At the Comex close: December gold slipped $18.60 to $1,817.20; September silver fell 23 cents to $25.55; October platinum fell $19.20 to $1,048.40; and September palladium picked up $13.30 to $2,656.20 an ounce.