Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold rose 0.8% to close near $1,938 as ongoing concerns about inflation and geopolitics trumped rising bond yields and a stronger dollar to lift alternative stores of value. It was the metal's highest finish since March 31.

With the cost of living rising at the highest rate in 40 years, the Fed is planning to start unwinding pandemic relief and sharply ramp up interest rates, the minutes from its March meeting revealed yesterday.

Starting after its May meeting, the Fed will reduce its $9 trillion balance sheet by $95 billion per month, by far the fastest pace in history, as it plays catch up behind the strongest inflationary pressure the economy has seen since the early 1980s.

In addition, "most" Fed officials are now onboard for a series of half-point rate hikes, according to the minutes. St. Louis Fed President James Bullard, an influential inflation foe and voting member, is calling for a benchmark rate of 3.5% by year end, a full 3% higher than today.

10-year Treasury yields pushed to a three-year high above 2.65% on the Fed's far more aggressive posture while the dollar added 0.2% against major rivals, capping gold's rise.

Many investors feel the Fed is behind the inflationary curve and risks recession by trying to compensate with aggressive actions. While higher yields typically suppress gold's gains, bullion continues to draw strong demand as a hedge against both inflation and recession.

Safe-haven inflows because of Russia's war on Ukraine are also supporting the metal despite headwinds from higher yields.

The other precious metals were also higher, with silver adding 1.1% while platinum and palladium rose 0.5% and 1.8%, respectively.

At the Comex close: June gained $14.70 to $1,937.80; May silver rose 28 cents to $24.74; July platinum picked up $4.90 to $958; and June palladium climbed $38.40 to $2,223.10 an ounce.