Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold fell 1.1% to close under $1,944 after upbeat data fueled additional rate-hike bets, boosting yields and the dollar, while progress on the debt ceiling reduced demand for safe havens. It was the metal's lowest finish in two months.

Initial jobless claims rose by less than forecast last week while totals from the week before were revised sharply lower, signaling residual strength in the labor market. And first-quarter GDP was revised up to 1.3% from 1.1%, suggesting the economy is more resilient to the pressures of rate hikes than previously thought.

Following a string of hawkish comments from Fed officials this week, the upbeat data is causing traders to raise their bets on additional rate hikes. Fed funds futures are now evenly split at 50/50 on a quarter-point increase in June, followed by a 20% likelihood of a similar hike in July.

Benchmark 10-year Treasury yields pushed back above 3.8% on the shifting rate view, pressuring gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Tracking higher with yields, the dollar rallied for a fourth session to a fresh two-month high against major rivals. The euro fell sharply after GDP for Germany, the biggest economy in the EU, fell 0.3% in Q1. A stronger dollar pressures gold and other commodities by making them pricier in other currencies.

Also weighing safe-haven demand, the White House and Congress reported progress on debt-ceiling negotiations, lowering the likelihood of a catastrophic default. But Fitch Ratings said the brinkmanship so far has placed the top triple-A rating of the US on "rating watch negative," the first step to downgrading.

Fannie Mae forecasters say the US will enter a "moderate recession" in the second half of the year as the higher interest rates and tighter lending take their toll.

The other precious metals were mostly lower, with silver and platinum dropping 1.4% and 0.3%, respectively, while palladium picked up 1.3%.

At the Comex close: June gold dropped $20.90 to $1,943.70; July silver slid 33 cents to $22.91; July platinum dipped $3.20 to $1,026.30; and June palladium rose $17.50 to $1,415.60 an ounce.