Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold gained 0.6% to close above $3,294 as Treasury yields and the dollar declined on the exploding US deficit and possibility of trade deals with Canada and China. Bullion added 0.2% for the month and 5.5% for the quarter. Silver slipped 0.7% to finish at $35.85, posting a monthly rise of 11.7% and a quarterly increase of 4%.

With President Trump's so-called big, beautiful bill working its way through Congress, apparently destined to add more than $3 trillion to the already-monstrous $37 trillion deficit over 10 years, investors are nervous.

The dollar fell another 0.6%, putting it on track for its sixth straight monthly drop. So far this year the buck has lost nearly 12% against a basket of major rivals, its worst performance since the 1970s. A weaker dollar supports gold and other commodities by making them less expensive in other currencies.

Also weighing on the dollar was measured optimism about possible trade agreements. Canada dropped a digital sales tax affecting US companies, opening the door to further negotiations. An agreement was reached this week between the US and China over rare earth minerals, renewing hopes for further talks.

US-induced trade wars and inflationary tariffs are creating uncertainty around policy decisions and the US economy, driving a rally in longer-term Treasurys that has lowered yields in recent weeks. Falling yields boosted gold by decreasing the opportunity cost for holding it instead of bonds for safety.

But short-term Treasurys are a different story. Trump said he wants to finance the added debt burden of his tax bill by issuing more short-term Treasury bills, apparently to reduce the interest cost that would otherwise accrue by issuing long-term debt. But skeptical bond traders are demanding more compensation to purchase this short-term debt, pushing yields up dramatically at the short end of the curve.

The White House has been increasing pressure on the Fed to lower interest rates, in part to offset this added debt service for tax cuts. Additional data this week on employment and jobless claims may give further clues about the Fed's coming decisions.

Platinum pulled back 0.5% today but rose 26.2% this month and 32.1% this quarter. Palladium shed 3.7% but held onto a monthly and quarterly rise of 10%.

At the New York spot close: gold gained $20.70 to $3,294.40; silver slipped 24 cents to $35.85; platinum dipped $7.25 to $1,334; and palladium shed $42.80 to $1,101 an ounce.