Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinExtending its slide, gold fell 0.9% to close under $1,809 as resurgent risk appetite, higher bond yields, and an increasingly hawkish rate view from the Fed pressured alternative assets. The metal lost 3.9% for the week, its worst in 11 months.

US equities rebounded sharply as bargain-hunters speculated that the recent selloff is overdone and a bottom is near. The Dow bounced 1.5% higher while the S&P 500 and Nasdaq added 2.5% and 4%, respectively.

But all three indexes remain on track for weekly losses, with the S&P 500 flirting with a bear market correction of around 18% since its January peak.

Benchmark 10-year Treasury yields also bounced higher after two days of declines as traders shifted away from government debt. Higher yields are a headwind for gold because they increase the opportunity cost for holding it instead of bonds as a safe-haven asset.

The increasingly hawkish rate outlook from the Fed also supported bond yields after Cleveland Fed President Loretta Mester said a 75-basis-point increase is back on the table for September. Fed Chair Jerome Powell had calmed markets last week by saying a hike of that size is not being "actively considered" by the central bank.

The dollar edged down 0.1% on profit-taking after surging this week to a new 20-year high against major rivals. The buck still closed the week nearly 1% higher, pressuring gold and other commodities by making them more expensive in other currencies.

The other precious metals were mixed. Silver added 1.1%, but notched a weekly decline of 6.2%, its biggest since late January. Platinum edged down 0.1% while palladium rose 3.1%.

At the Comex close: June gold dropped $16.40 to $1,808.20; July silver rose 23 cents to $21; July platinum dipped 70 cents to $930.70; and June palladium climbed $57.10 to $1,917.70 an ounce.