Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.7% to close at $1,333 as stocks tumbled on rising bond yields, boosting demand for safe-haven assets.

US equity indexes dropped sharply today, with the Dow losing 1.7% and the S&P 500 1.3%, after yields on 10-year Treasurys hit the psychologically-important 3% mark for the first time in four years. The sell-off occurred despite a solid start to the earnings season, with more than 80% of S&P 500 companies beating profit forecasts.

Treasury yields have risen along with higher inflation expectations, which have been driven in part by sharply higher commodity prices. The CRB commodity index rose last week to the highest level since mid-2015 and oil prices hit a 3.5-year high.

Inflation cuts into the value of fixed payments for bondholders, causing many to sell lower-yielding bonds in favor of higher-yielding issues. Inflation also hampers companies from turning profits, prompting investors to shift out of equities. And finally, rising inflation makes it more likely that the Fed will accelerate the pace of rate hikes, which further lifts yields.

The dollar slipped 0.2% against major rivals as traders took profits from its five-session rally. The buck had climbed to a three-month high yesterday in anticipation of Treasurys rising above 3%. A falling dollar supports gold and other commodities priced in it for global trade by making them less expensive in other currencies.

The other precious metals were mostly higher, with silver and platinum rising 0.7% and 1.4%, respectively, while palladium slid 0.8%.

At the Comex close: June gold gained $9 to $1,333; May silver rose 12 cents to $16.70; July platinum climbed $12.60 to $935; June palladium lost $8.10 to $971.65 an ounce.