Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold rose 1% to close above $1,973 despite an uptick in Treasury yields as the dollar receded on expectations that the Fed will pivot away from rate hikes, boosting alternative stores of value.

Yesterday's announcement that First Citizens will acquire the loans and deposits of failed Silicon Valley Bank, along with no new bad news about banking today, has helped assuage investor fears about instability in the sector.

In addition, consumer confidence inched higher last month, according to the Conference Board's survey, behind continued strength in the labor market and a general feeling that the US may avoid a recession driven by higher interest rates.

The upbeat US data combined with cautious optimism about banks to lure traders tentatively away from bonds, lifting benchmark 10-year Treasury yields by a few basis points to 3.55% and pulling 2-year yields back above 4%.

The dollar, meanwhile, fell 0.4% against major rivals as traders speculated that the Fed will nonetheless pause rates hikes in May because of residual uncertainty about banking stability. Fed fund futures are pricing-in a 51% likelihood of no rate hike at the Fed's next meeting.

Higher yields typically weigh on gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset. But a weaker dollar lifts gold and other commodities by making them less expensive in other currencies, bolstering demand overseas.

Also supporting gold, oil prices rallied to a two-week high above $73 per barrel on rising demand in China and supply concerns stemming from a temporary halt to Kurdish exports through Turkey. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were mostly higher, with silver and palladium rising 1.2% and 0.8%, respectively, while platinum slipped 1.1%.

At the Comex close: April gold gained $19.70 to $1,973.50; May silver added 28 cents, to $23.42; July platinum dropped $10.60 to $971.90; and June palladium picked up $10.60 to $1,414.70 an ounce.