Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinExtending last week's 1.1% gain, gold added 0.1% to close above $1,948 despite higher Treasury yields as investors hedged against inflation ahead of tomorrow's CPI print. It was the metal's third straight winning session.

The March consumer-price index, due on Tuesday, is expected to show the US cost of living rising at a 12-month rate of 8.5%, the hottest since 1981.

Meanwhile, Russia is apparently repositioning its forces for a new offensive in eastern Ukraine, which promises to stoke additional global inflation by further damaging supply chains for food and energy.

Against this background, Fed officials have been calling for aggressive policy measures including sharply higher interest rates and accelerated quantitative tightening, both of which are intended to slow inflation by slowing the economy.

Adding his voice to the chorus, Chicago Federal Reserve President Charles Evans sad today that a succession of half-point rate hikes is now "highly likely," with the goal of lifting the benchmark rate by another 2% by year end.

Benchmark 10-year Treasury yields continued to march higher on the hawkish rate view, pushing to nearly 2.8%, another three-year high. Higher yields create headwinds for gold by increasing the opportunity cost for owning it instead of bonds as a safe-haven asset.

The dollar also edged higher, picking up 0.1% against major rivals and capping gold's gains by making it pricier in other currencies.

But gold is rising alongside yields and the dollar as investors hedge not only against inflation but also the growing concern that the Fed, already far behind the curve, will tighten too strongly and tip the economy toward recession.

The other precious metals were mostly higher, with silver and platinum picking up 0.7% and 0.2%, respectively, while palladium dipped 0.1%.

At the Comex close: June gold gained $2.60 to $1,948.20; May silver rose 16 cents to $24.99; July platinum edged up $2.20 to $977.80; and June palladium dipped $3.30 to $2,416.80 an ounce.