Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.4% to close above $1,905, its highest level since early January, as sharply higher consumer prices stoked demand for the metal as a hedge against inflation. Gold added 1.5% for the week, notching its fourth straight weekly win, and 7.8% for the month.

Consumer prices rose sharply in April, with personal consumption expenditures index adding 0.6%, in line with forecasts. The Fed's preferred measure of inflation, the PCE has now risen 3.6% over 12 months, well above the Fed's 2% target.

Remarkably, Treasury yields fell after the inflation data as traders were relieved that the spike in prices was not greater. Fed officials have warned that a burst of inflation is expected as the economy reopens. But the central bank has been steadfast in reassuring the markets that easy money policies will continue anyway, with near-zero interest rates projected through 2022.

Flat or falling yields and sharply higher inflation are a bullish combination for gold, encouraging investors to seek out the metal as an inflation hedge without the added opportunity costs of holding a non-yielding asset instead of bonds.

The dollar was flat as Forex traders saw no impetus to monetary tightening in the inflation report. For the month, the buck fell 3% as other major economies catch up with the US in vaccination rates. A weaker dollar boosts gold and other commodities by making them less expensive in other currencies.

The other precious metals were also higher for the day and week but mixed for the month. Silver added 0.3% to gain 1.1% for the week and 8.3% for the month. Platinum rose 0.3% for the day and 1.1% for the week but lost 1.9% in May. Palladium added 0.7% today and 2% this week but fell 4.2% this month.

At the Comex close: August gold gained $6.80 to $1,905.30; July silver rose 7 cents to $28.01; July platinum picked up $3.30 to $1,182,40; and September palladium added $19.50, to $2,830.13 an ounce.