Gold News & Info

Source:Bill Musgrave, American Gold Exchange

Austin— Gold dropped 0.8% to close at a five-week low near $1,216 as the dollar pushed higher on expectations that the Federal Reserve will raise interest rates later this month, dulling appetite for alternative stores of value.

The dollar rose 0.2% against major rivals as traders continued to position for the second hike in three months. Generally robust economic data and hawkish recent comments from prominent Fed members have set the stage. CME Fedwatch, which forecasts the likelihood of rate hikes based on trade in Fed fund futures, places the odds at greater than 86%.

Higher rates support the dollar by foreign exchange investment seeking higher yield, pressuring gold and other commodities denominated in the dollar by making them more expensive overseas.

Stocks eased on the prospect of tighter monetary policy, with the Dow and S&P 500 slipping 0.1% and 0.2%, respectively, for their first consecutive losing sessions in a month. Treasury yields crept higher with the dollar.

Gold received some support from Commerce Department data showing that the U.S. trade deficit jumped to almost a five-year high in January behind rising oil prices. In addition, the Atlanta Fed said real GDP is growing at just 1.3% in the first quarter, substantially lower than the already-low annualized rate of 1.9% for all of 2016.

The other precious metals were mostly lower, with silver and platinum falling 1.3% and 1.8%, respectively, while palladium added 0.2%.

At the Comex close: April gold fell $9.40 to $1,216.10; May silver lost 24 cents to $17.54; April platinum dropped $17.10 to $961.10; and June palladium added $1.85, to $775 an ounce.