Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slipped 0.3% to finish under $1,940 as Treasury yields and the dollar edged up ahead of tomorrow's start of the Fed's meeting on monetary policy.

The Fed is almost universally expected to raise interest rates by a quarter-point on Wednesday at the conclusion of its two-day meeting, lifting the benchmark rate into the 4.5% to 4.75% range. It would be the smallest rate increase since the one that launched this hiking cycle 10 months ago, when rates were near zero.

The main question is whether the policy statements following the meeting will repeat the hawkish rhetoric that has dominated Fed speeches in recent months, or signal the imminent end of this aggressive policy direction while acknowledging that inflation has peaked and the economy is already risking recession.

While the central bankers have repeatedly promised to push the terminal rate above 5% and leave it there for an expended period, Fed funds futures trading projects only two quarter-point hikes this year, with a terminal rate of around 4.9%, achieved by June at the latest. Gold has risen for six straight weeks on expectations that the market's view will prevail.

Today, minor profit-taking from that six-week gold rally took precedence.

Benchmark 10-year Treasury yields crept back above 3.55% as traders hedges against the possibility of hawkish messaging this week. Rising bond yields weigh on gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Tracking with yields, the dollar picked up 0.3% against major rivals, pressuring gold and other commodities by making them pricier overseas,

The other precious metals were higher, with silver rising 0.5% while platinum and palladium picked up 0.4% and 1.8%, respectively.

At the Comex close: April gold slipped $6.40 to $1,939.20; March silver added 11 cents, to $23.73; April platinum climbed $3.80 to $1,020.60; and March palladium advanced $28.30 to $1,628 an ounce.