Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.2% to close near $2,005 as weak consumer data and renewed concerns about the banking sector pressured yields, boosting safe-haven assets.

Consumer confidence fell to a nine-month low in April, the Conference Board reported, as Americans become increasingly pessimistic about a weakening job market and possible recession. Consumer spending accounts for roughly 70% of GDP.

First Republic Bank, already under pressure from liquidity problems, reported a plunge in deposits of $100 billion in Q1, causing shares to plummet and adding to jitters about the health of the US banking sector.

Wall Street retreated on rekindled bank worries and recession fears, with the Dow and S&P 500 falling 1% and 1.5%, respectively, while the Nasdaq lost 2%.

Benchmark 10-year Treasury yields tumbled by the most in a month to under 3.4% as investors scrambled for the perceived safety of government debt. Falling yields boost gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

A shifting rate view also weighed on yields. Fed funds futures traders dropped their bets on a May rate hike to 73% probability, down from more than 91% yesterday.

Capping gold's gains, the dollar rose 0.5% against major rivals as Forex traders gravitated away from riskier currencies. A rising buck weighs on gold by making it more expensive overseas.

The other precious metals were mostly lower. Silver and palladium dropped 1.3% and 3.5%, respectively, while platinum edged up 0.1%.

At the Comex close: June gold 4.70 to $2,004.50; May silver slid 43 cents to $24.88; July platinum rose 50 cents to $1,098.20; and June palladium dropped $53.50 to $1,480.90 an ounce.