Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold surged 0.8% to close at $1,825 as the dollar and Treasury yields declined on Fed Chair Jerome Powell's dovish Congressional testimony, boosting demand for alternative stores of value. It was the metal's highest finish in a month.

In a prepared statement to the House Financial Services Committee, the top US central banker stuck to his credo that the recent burst of inflation is transitory and will fall back toward the Fed's 2% target "in coming months."

In addition, Powell asserted that "there is still a long way to go" in healing a labor market that remains 7.5 million jobs under pre-Covid levels, and US monetary policy will continue to offer "powerful support" to the economy "until the recovery is complete."

The comments come as US inflation is rising at the fastest level in more than a decade. The Producer Price Index, released today, showed wholesale inflation jumped 1% in June and 7.3% over the past 12 months, the highest reading since the index was revised in 2010. Yesterday, the CPI for June revealed consumer prices surging at the fastest rate in 13 years.

Benchmark 10-year Treasury yields dropped sharply after Powell's remarks, lifting gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar tumbled 0.4% against major rivals as traders got the message that the Fed is not disposed to raise interest rates prematurely to fend off inflation. A weaker dollar supports gold and other commodities by making them less expensive in other currencies, lifting overseas demand.

The combination of sharply higher inflation, low Treasury yields, and near-zero interest rates is bullish for gold as investors seek out ways to protect purchasing power.

The other precious metals were mostly higher, with silver and platinum rising 0.5% and 1.5%, respectively, while palladium dipped 0.2%.

At the Comex close: August gold jumped $15.10 to $1,825; September climbed 13 cents to $26.27; October platinum added $16.90, to $1,128.10; and September palladium dropped $6.20 to $2,826.30 an ounce.