Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.5% to close at a two-week high above $1,292 as weak US data and geopolitical concerns undermined risk appetite, driving demand for safe havens.

US economic growth in the first quarter was weaker than previously thought, according to government data, with GDP growing at 3.1% rather than the initial estimate of 3.2%. More alarming for Wall Street, corporate profits fell 2.8% before taxes, the biggest decline in four years. Q2 GDP growth is projected to be much weaker at under 2% as the trade war and falling state spending take their toll.

Inflation rose 1.4% during Q1, year-over-year, far below the Fed's target 2%. The slowing pace of inflation is one reason that the market has priced-in an 85% likelihood of a rate cut by the Fed by December. Lower interest rates are bullish for gold because they pressure the dollar, making gold less expensive in other currencies and boosting overseas demand.

US equity indexes vacillated between small gains and losses on concerns about the deepening trade war with China and rising Middle East saber-rattling. John Bolton, President Trump's National Security Advisor, accused Iran of attacking a Saudi oil port, sabotaging UAE oil tankers, and pursuing nuclear weapons. Tensions with Iran have risen in recent weeks after the US increased its military presence in the region.

Gold's gains came despite sharply lower oil prices. WTI crude fell 3.8% to under $57 per barrel, a two-month low, as domestic stockpiles fell less than expected, according to government data. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were also higher, with silver rising 0.6% while platinum and palladium added 0.3% and 1.6%, respectively.

At the Comex close: August gold gained $6.10 to $1,292.40; July silver picked up 8 cents to $14.49; July platinum added $2.40, to $794.10; and September palladium rose $21.80 to $1,365.70 an ounce.