Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold slid 0.8% to close at $2,385.50 as higher import prices and Fed jawboning boosted the dollar, prompting trades to take profits from yesterday's 1.5% rise to a one-month high. Silver added 0.5% to finish at $29.67 an ounce.

The cost of imported goods jumped 0.9% in April, the fastest pace in two years and triple most forecasts. It was the fourth consecutive month of rising import prices, adding to the Fed's concern that inflation remains sticky in some areas of the economy.

The news took a bit of glow off yesterday's cooler CPI print. US consumer inflation fell to 3.4% on an annualized basis in April, prompting traders to increase their best that the Fed will begin cutting interest rates in September.

The odds slipped a bit on the import price data, from 73% yesterday to 67% today, according to CME FedWatch.

Meanwhile, several regional Fed officials offered comments intended to talk the market down from rate-cut exuberance. The New York Fed's John Williams said lower rates are unlikely "in the very near term." Loretta Mester of the Cleveland Fed said, "progress on inflation has been disappointing," but it's too early to conclude it is "poised to reverse course."

The dollar rebounded 0.2% against major rivals, pressuring gold and other commodities by making them pricier overseas. Benchmark 10-year Treasury yields were little changed, edging down a few basis points.

Platinum inched up less than 0.1% while palladium dropped 1.6%.

At the New York spot close: gold slid $9.40 to $2,385.50; silver added 15 cents, to $29.67; platinum picked up $1.20 to $1,071.30; and palladium fell $16.60 to $998.40 an ounce.