Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold edged down 0.2% to close near $1,923 as yields and the dollar rose ahead of the release of the minutes from the March Fed meeting, pressuring alternative stores of value. After the minutes' release, the metal wobbled before pushing back up to $1,928 in electronic trading.

At its March meeting, the Fed settled on shrinking its $9 trillion balance sheet by a $95 billion per month, the fastest ever, after a three-month ramp up starting in May. Many officials wanted a 50-basis point rate hike in March, twice the actual increase, and most support larger hikes in coming months to control the highest inflation in 40 years.

Benchmark 10-year Treasury yields rose above 2.6% on the aggressive tightening plan, creating headwinds for gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar added 0.2% against major rivals on the hawkish rate view and flights to safety because of Russia's war on Ukraine, which now appears focused on partitioning off the eastern part of the country. A rising dollar pressures gold and other commodities by making them more expensive overseas.

Also weighing on gold, crude price dropped 4% to close under $100 per barrel after the International Energy Agency said it will release 120 million barrels from reserves to offset supply losses due to the war and sanctions on Russia. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

Sky-high inflation, rapidly tightening monetary policy, and volatile geopolitics are stoking serious worries about recession. Deutsche Bank is now projecting recession in the US and Europe within the next two years, the first major Wall Street banks to do so.

Nasdaq fell more than 2%, the S&P 500 lost 1%, and the Dow slid 0.4% as the increasingly hawkish Fed and escalating sanctions on Russia spurred risk-off sentiment, lifting gold after hours.

The other precious metals were also lower, with silver sliding 0.3% while platinum and palladium fell 2.1% and 2.3%, respectively.

At the Comex close: June gold dipped $4.40 to $1,923.10; May silver dropped 8 cents to $24.46; July platinum lost $20 to $953.10; and June palladium shed $50.60 to $2,184.70 an ounce.