Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold gained 1.5% to close at $2,375, the highest level in nearly three weeks, as weak jobs and consumer data combined with net-dovish Fed comments to reinforce expectations of lower interest rates. Gold rose 2.9% for the week, its best week in five. Silver rose 0.5% to finish at $28,28 and post a weekly gain of 6.9%.

Recent data releases have pointed to a softening of the labor market, something the Fed has been awaiting before pivoting to rate cuts. First-time jobless claims rose to a nine-month high last week, while nonfarm payrolls added an anemic 175,000 jobs in April.

In addition, the University of Michigan's consumer-sentiment index tumbled in April to the lowest reading in six months, while inflation expectations for the next year rose to 3.5% from 3.2% in March. Consumer spending accounts for roughly 70% of GDP.

Several prominent Fed officials weighed in on interest rates today, with the overall stance leaning dovish. Dallas Fed Reserve President Lorie Logan said it's "not clear" whether monetary policy is tight enough. But Chicago Fed President Austan Goolsbee said policy is already "relatively restrictive" and Atlanta Fed President Raphael Bostic said the Fed on track to cut rates this year.

Fed funds futures traders expect two rate reductions of 25 basis points this year, with the first coming in September.

Treasury yields and the dollar were both little changed.

After reaching a new all-time high above $2,400 in late April, the gold price consolidated in recent weeks as the fears of a direct conflict between Israel and Iran receded. Now fundamentals are reasserting themselves. Gold remains supported by unprecedented central bank buying, aggressive physical demand in China, and the prospects of falling interest rates at home and abroad.

Platinum picked up 1.7% today and 4.3% this week. Palladium rose 1% for a weekly gain of 3.5%.

At the New York spot close: gold gained $34.70 to $2,375; silver added 14 cents, to $28.28; platinum picked up $16.40 to $1,007.20; and palladium rose $10.40 to $981.70 an ounce.