Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold jumped 1.5% to close above $2,055 as falling inflation and rising layoffs fueled optimism that the Fed is nearing the end of its aggressive rate hike cycle, pressuring the dollar and boosting alternative stores of value. It was the metal's highest finish since August 2020, when it achieved its all-time high of $2,069.40.

The producer price index for final demand fell 0.5% in March, pushing the 12-month rate of wholesale inflation down to 2.7% from 4.9% in February. Wholesale inflation is generally seen as a predictor for future consumer inflation, which fell to an annual 5% in March.

Separately, first-time jobless claims climbed to 239,000 last week, showing a significant increase in corporate layoffs and hinted toward a slackening of the labor market.

The dollar fell 0.5% to a two-month low against major rivals on expectations that the Fed will pause after one more rate hike and then start cutting rates in July. Fed funds futures traders are pricing in a 71% chance of a quarter-point increase in May, followed by a 70% chance quarter-point decrease in July.

Adding to the dovish rate view, the minutes from the March Fed meeting released yesterday showed that several members advocated pausing hikes in March, concerned about the recessionary pressures of the banking crisis and ensuing credit crunch.

Falling interest rates weaken the dollar by making it less attractive to Forex traders seeking higher yield. A weaker dollar supports gold and other commodities in turn by making them less expensive in other currencies, boosting demand overseas.

The other precious metals were also sharply higher, with silver climbing 1.8% while platinum and palladium rose 3.7% and 2.7%, respectively.

At the Comex close: June gold gained $30.40 to $2,055.30; May silver added 47 cents, to $25.93, one-year high; July platinum advanced $38 to $1,065.50; and June palladium picked up $39.70 to $1,495.60 an ounce.