Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold gained 0.6% to close at $2,330 as yields and the dollar pulled back on dovish Fed commentary about interest rates, lifting alternative stores of value ahead of this weeks crucial PCE release. Silver slipped 0.3% to finish under $29.50 an ounce.

A pair of Fed officials made a case for lowering interest rates this fall. On CNBC, Chicago Fed President Austin Goolsby identified three key stresses on the US economy: rising jobless claims, cooling consumer spending, and a sharp increase in consumer delinquencies of credit cards. Together, he suggested, they signal that interest rates may be too restrictive.

Separately, San Francisco Fed President Mary Daly, echoed concerns about the ongoing impact of the highest rates in a generation. With unemployment an increasing risk, the Fed needs to exhibit care in monetary policy to prevent a painful disruption to the economy from overtightening, she said at a conference.

This Fridays release of the Feds favorite inflation gauge, the personal consumer expenditures (PCE) index, should provide additional clues about the course of interest rates. If it follows the recent CPI and PPI data showing lower inflation pressure, the odds of rate reductions will likely increase.

Fed fund futures are currently pricing in a quarter-point rate cut at around 66%.

Benchmark 10-year Treasury yields edged slightly lower, buoying gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar shed 0.2%, retreating from an eight-week high, as traders prepare for the PCE release and the possible currency intervention by the Bank of Japan to lift the yen. Japans currency is nearing a 34-year low against the dollar, a level that triggered 9.8 million yen in support by the BOJ last April.

Rallying oil also supported gold. US benchmark WTI crude added another 1.2%, driven by expectations of strong driving demand this summer and supply concerns because of conflicts in the Middle East and Ukraine. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

Platinum and palladium rose 0.6% and 6.5%, respectively.\At the New York spot gold close: gold gained $13.60 to $2,330; silver slipped 8 cents to $29.49; platinum picked up 5.5% to $1,001.80; and palladium surged $58 to $976.10 an ounce.