Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold rose 0.2% to close above $3.333 as the dollar fell to a 3-year low on soft US data and growing concerns about the future independence of the Fed. Silver rose 0.9% to finish at $36.59 an ounce.

The Commerce Department reported the economy slowed by a revised 0.5% in Q1, with GDP at an annualized 1.9%, compared to 2.4% in Q4 of last year. The falloff was attributed to reduced consumer spending, which comprises roughly 70% of GDP.

First-time jobless claims dipped last week, suggesting that layoffs are not increasing. But the Labir Department said state unemployment rose swelled in June to the highest level in 3-1/2 years, signaling that employers are hesitant to hire because of fluctuating tariff policies.

Against this backdrop the Fed is coming under increased pressure from the White House over interest rates. Testifying before Congress this week, Fed Chair Jerome Powell said the likelihood of rekindled inflation because of tariffs will keep the Fed on hold.

But President Trump is demanding large rate cuts now. To turn up the heat, he mused today about appointing Powell's replacement now, effectively creating a shadow Chair to influence policy, nearly a year before Powell's term expires.

The dollar lost 0.6% as Forex traders grapple with the prospect of a more dovish and politicized Fed. A weaker dollar boosts gold and other commodities by making the less expensive on the other currencies.

Benchmark 10-year Treasury yields fell under 4.26%, supporting gold by reducing the opportunity cost for holding it instead of bonds for safety.

Platinum and palladium rose 5.8% and 7.9%, respectively, on ongoing supply concerns because of the Russia-Ukraine war. Russia is a major producer of both PMGs.

At the New York spot close: gold gained $6.40 to $3,333.50; silver rose 34 cents to $36.59; platinum climbed $78.70 to $1,431.10; and palladium advanced $84 to $1,153 an ounce.