Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slipped 0.2% to close under $1,300 as higher inflation and an agreement between the US and North Korea boosted the dollar, reducing demand for alternative stores of value.

President Trump and Kim Jong Un signed a historic pact to eliminate nuclear weapons on the Korean peninsula and work toward better relations. While scant on concrete commitments, the agreement nonetheless reduces friction between two leaders who recently threatened each other with nuclear devastation.

The dollar edged up 0.3% as the reduction in global tensions pulled foreign exchange investment away from safe-haven currencies like the Japanese yen. A rising dollar tends to weigh on gold and other commodities priced in it for international trade by making them more expensive in other currencies.

Also supporting the buck, consumer inflation as measured by the CPI rose 0.2% in May, notching its fastest annual rise in six years, at 2.8%. The more closely-watched core inflation rate, which strips out volatile food and energy costs, edged up to 2.2%.

Higher inflation will support the Fed in its likely decision to increase interest rates by a quarter-point during this week's meeting. But the relatively muted core rate is expected to provide little impetus to accelerate the pace of rate hikes this year.

The other precious metals were also lower, with silver dropping 0.4% while platinum and palladium lost 0.5% and 0.1%, respectively.

At the Comex close: August gold slipped $3.80 to $1,299.40; July silver dropped 6 cents to $16.89; July platinum fell $4.90 to $901.50; and September palladium dipped $1.20 to $1,015.30 an ounce.