Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slipped 0.5% to close under $1,965 as the dollar strengthened on improving US data and debt-ceiling worries, undercutting alternative stores of value. It was the metal's third straight softer session.

The impasse between the White House and Congress over the debt ceiling dragged on for another day, pushing the Treasury closer to a default that could destabilize the global financial system. Secretary Yellen reiterated today that early June is the deadline to avert the potential catastrophe.

The dollar rose another 0.3% to a fresh two-month as Forex traders sought safety in the US currency. Hawkish commentary from Fed officials in recent weeks has also fueled the buck, in turn pressuring gold and other commodities by making them more expensive overseas.

Fed Governor Christopher Waller added his voice to the choir, stating he will not support a pause in rate hikes until he sees more progress on inflation. Waller said he will be especially attentive to this Friday's release of April's PCE inflation report.

The minutes from the Fed's early-May meeting showed the central bankers undecided on the path forward, with "several" saying more hikes "may not be needed" while "some" said additional increases were "likely."

But stronger-than-expected data since then, especially on retail sales, industrial output, and the growth in the services sector, have rekindled worries that inflation may remain stay higher for longer than hoped.

Benchmark 10-year Treasury yields edged up slightly on the increasingly hawkish rate outlook. Higher yields weigh on gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The other precious metals were also lower, with silver falling 1.6% while platinum and palladium dropped 2.7% and 3.4%, respectively.

At the Comex close: June gold fell $9.90 to $1,964.60; July silver slid 38 cents to $23.24; July platinum dropped $28.10 to $1,029.50; and June palladium lost $48.60 to $1,398.10 an ounce.