Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.7% to close above $1,977 after progress in debt-ceiling negotiations pressured yields and the dollar, lifting alternative stores of value.

President Biden and Speaker McCarthy reached an agreement over long weekend to raise the debt ceiling for two years in exchange for cuts in spending. The deal must be approved by Congress, where hardliners on both sides are likely to take issue with the compromise.

Benchmark 10-year Treasury yields fell to 3.7% on optimism that the US can avoid a devastating default. Falling yields support gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar gave up early gains to slip slightly into the red after Masato Kanda, Japan's vice finance minister for international affairs, told the BOJ that the government is prepared to intervene to support the yen. The Japanese currency rounded sharply from a six-month low against the buck on the statement.

Ongoing dollar strength has been a primary headwind for gold in recent weeks as the Fed has signaled its intention to raise interest rates further. Following last week's uptick in the PCE, the Fed's preferred inflation gauge, Fed fund futures trading now puts the odds of a June hike at 69%, up from 28% one week ago.

The other precious metals were lower, with silver sliding 0.5% while platinum and palladium dropped 0.6% and 2%, respectively.

At the Comex close: August gold rose $14 to $1,977.10; July silver slipped 12 cents to $23.24; July platinum dropped $6.20 to $1,021.90; and September palladium futures shed $28.60 to $1,397.50 an ounce.