Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold gained 0.4% to close near $2,423 on rate-cut hopes and safe-haven inflows after soft inflation data last week and the failed assassination attempt on Donald Trump over the weekend. Silver slipped 0.7% to finish at $30.67 an ounce.

Speaking at the Economic Club of Washington today, Fed Chair Jerome Powell said three straight months of falling inflation add somewhat to confidence that inflation is falling sustainably to the Feds 2% target. Powell has said repeatedly that the Fed needs this confidence before it starts unwinding interest rates.

The comments came after the most recent consumer price index, released last week, showed inflation falling in June for the first time in four years, pulling the annual rate down to 3%, the lowest in a year.

Fed fund futures traders now see a 94% likelihood of at least a quarter-point cut in September, with a second cut expected by December. Lower rates support gold by lowering the dollar and Treasury yields. A weaker dollar makes gold cheaper overseas while lower yields reduce the opportunity cost for holding it instead of bonds.

Adding to the dovish rate view, New Yorks Empire State factory gauge contracted for the eight straight month in July.

Gold also received support from flights to quality after a gunman shot at Donald Trump over the weekend, wounding his ear. The assassination attempt has increased his chances of winning the November election, according to betting markets, and is expected to increase volatility in bonds and stocks.

Platinum and palladium slid 0.3% and 2.2%, respectively.

At the New York spot close: gold gained $8.90 to $2,422.90; silver slid 21 cents to $30.67; platinum edged down 2.80 to $1,002.90; and palladium shed $21.10 to $951.20 an ounce.