Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold rose 0.2% to close above $1,901 despite an uptick in yields and the dollar as dovish comments from Fed officials lifted demand for inflation hedges. It was the metal's first finish above the psychologically important $1,900 level since early January.

Despite sharply higher inflation, several prominent Fed members have again reiterated the central bank's dedication to easy money policies, reinforcing the prospect that real bond yields will remain negative for years to come.

Chicago Fed President Charles Evans said yesterday that recent, strong inflation readings are "not a precursor" to "undesirably high levels of inflation." Separately, Fed Vice Chair Richard Clarida said the Fed has tools to curb an outbreak of inflation without derailing the recovery via prematurely raising interest rates.

Near-zero interest rates and rising inflation result in negative real yields for Treasurys, wherein yields are less than the rate of inflation. Negative real yields are bullish for gold because they eliminate the inflation-adjusted opportunity cost for holding the metal instead of bonds.

Capping gold's gains, the dollar rebounded from more than four-month lows, adding 0.4% against major rivals after the yen tumbled on Japan's weakening economic outlook. A stronger dollar creates a headwind for gold and other commodities by making them pricier in other currencies.

Benchmark 10-year Treasury yields crept up 2 basis points but held near three-week lows. 30-year yields, however, fell further on the dovish Fed messaging.

The other precious metals were mixed, with silver and palladium sliding 0.6% and 1.2%, respectively, while platinum added 0.3%.

At the Comex close: June gold rose $3.20 to $1,901.20; July silver slid 18 cents to $27.88; July platinum added $3.30, to $1,200.20; and September palladium lost $33.20 to $2,752.70 an ounce.