Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slipped 0.9% to close at $1,766 after comments from Janet Yellen about higher interest rates triggered a rise in the dollar and undercut demand for alternative stores of value.

Treasury Secretary Yellen told the Atlantic in an interview aired today that interest rates might have to rise "somewhat" to prevent the economy from overheating. The remark was made within the context of rapidly escalating stock prices and was softened with reassurances that inflation will not become a problem.

Even though Yellen has no say in setting monetary policy, the markets responded sharply to the suggestion that tightening may be coming sooner than the Fed has let on. The Nasdaq tumble nearly 2% as investors rotated out of high-flying tech stocks in favor of defensive shares like healthcare and consumer staples. The S&P 500 lost 0.7% while the Dow was nearly flat.

The dollar rallied 0.4% to a two-week high against major rivals, fueled by risk-off sentiment and the hint of higher rates. A stronger dollar pressures gold and other commodities by making them more expensive in other currencies, undercutting overseas demand.

The other precious metals were mostly lower, with silver and palladium losing 1.5% and ol1%, respectively, while platinum added 0.1%.

At the Comex close: June gold dropped $15.80 to $1,776; July silver lost 40 cents to $26.56; July platinum picked up $1.70 to $1,231.80; and June palladium dipped $3.80 to $2,977,60 an ounce.