Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold slipped 0.9% to close under $2,323 after unremarkable inflation data prompted traders to close their books on May by taking profits. Still, the metal gained nearly 1% for the month to notch its fourth straight monthly win. Silver fell 3.5% to finish at $30.30 but still gained 14.9% in May.

The personal expenditures consumption index, considered the Feds preferred inflation gauge, rose 0.3% in April, holding the 12-month rate at 2.7%. The rise was precisely in line with forecasts. Factoring out food and energy, the core PCE rose 0.2% for the smallest gain since last December, holding the 12-month rate at 2.8%.

While the data suggested that the inflation surge of early 2024 may be fading, it gave little clarity on the timetable for the Fed to reduce interest rates. The cost of services housing, medical care, travel remains stubbornly high at 3.8% after rising 0.3% in April.

Still, Fed fund futures traders ran with the positive, boosting the odds of a September rate slightly to 53% from 50% before the data.

Benchmark 10-year Treasury yields pulled back to 4.5% on the modest shift in rate view. The dollar was virtually unchanged but posted its first monthly decline this year. A falling dollar lifts gold and other commodities by making them cheaper in other currencies.

Despite recent declines, gold has rallied more than 13% this year behind unprecedented central bank buying, aggressive physical demand in China, safe-haven inflows because of acute geopolitical turmoil, and the prospects of falling interest rates at home and abroad.

Platinum slid 0.4% today but gained 9.9% this month. Palladium lost 4.8% today for a monthly decline of 5.6%.

At the New York spot close: gold dropped $20 to $2,322.90; silver shed $1.09 to $30.30; platinum picked up $4 to $1,042; and palladium lost $45.10 to $899.20 an ounce.