Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold rose 0.8% to close above $2,330 after higher oil prices and soft retail sales data eroded Treasury yields and the dollar, lifting alternative assets. Silver added 0.3% to finish above $29.50 an ounce.

US retail sales were weaker than forecast in May, rising by a meager 0.1%, while sales for April were revised from flat to negative 0.2%. Sales in bars and restaurants, often viewed as a weathervane for the economy, fell 0.4% to post its fourth decline in six months, the longest bout of weakness since the pandemic.

Meanwhile, the CBO says the US budget deficit will surge to $1.195 trillion for fiscal 2024, exceeding the $1.695 trillion deficit of 2023 as the biggest since the pandemic. Increased spending on student loans, costs associated with bank failure, and aid to Ukraine and Israel were cited as reasons.

Benchmark 10-year Treasury yields edged down new 4.2% on the downbeat data, lifting gold by decreasing the opportunity cost for holding it instead of bonds for safety.

The dollar dipped slightly against major rivals, helping gold and other commodities by making them cheap in other currencies.

Another sharp rally in oil further supported the gold price. WTI crude jumped 1.5% to $81.75, the highest settlement since April, on increased US demand and expectations that OPEC+ will maintain price support. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

Platinum and palladium rose 0.6% and 1.5%, respectively.

At the New York spot close: gold gained $18 to $2,330.40; silver added a dime, to $29.51; platinum picked up $6.30 to $977.20; and palladium advanced $13 to $896.20 an ounce.