Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slipped 0.4% to close under $1,922 as the hawkish pivot by Jerome Powell continued to drive investors out of bonds, lifting yields and stocks while depressing alternative assets.

Fed Chair Powell's opened the door yesterday to significantly tighter monetary policy, saying he is ready to take the "necessary steps" to fight inflation even if they restrict economic growth. The Fed will now weigh a series of half-point rate hikes rather than the quarter-point increases outlined after last week's FOMC meeting.

Other Fed officials are also calling for stronger measures. St. Louis Fed President James Bullard, the lone dissenter to the quarter-point increase, reiterated his position that the overnight rate needs to be 3% by year end.

Separately, the San Francisco Fed's Mary Daly has shifted her stance to support a restrictive rather than neutral rate target, with half-point hikes along the way. The so-called neutral rate is where economic growth is neither stimulated nor impeded. It is currently considered 2.4%.

Benchmark 10-year Treasury yields continued to climb toward 2.4% as investors dumped lower-yielding bonds. Higher yields are a headwind for gold because the increase the opportunity cost for holding non-yielding bullion instead of bonds as a safe-haven asset.

The metal was also pressured by an uptick in risk appetite. The Dow and Global Dow added 0.7% and 1%, respectively, while the S&P 500 picked up 1.1% and the Nasdaq 2%.

Worries about the Ukraine war kept a floor under gold as Russian shelling continued to pummel Ukrainian cities and civilian infrastructure. More than 3.5 million people have now been displaced by the invasion.

The other precious metals were also lower, with silver dropping 1.6% while platinum lost 1.9% and palladium 2.4%.

At the Comex close: April gold slid $8 to $1,921.50; May silver dropped 41 cents to $24.90; April platinum lost $19.60 to $1,025.10; and June palladium shed $60.80 to $2,476.50 an ounce.