Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold slid 0.6% to hold above $1,986 despite soft US data and falling bond yields as the dollar tacked higher on weaker Eurozone inflation, pressuring alternative stores of value. The metal rose above $2,000 in intraday trading for the third time this month before slipping back on profit-taking.

Gold still finished the month 8.1% higher and scored a quarterly rise of 8.8% behind instability in the banking sector and an increasingly dovish rate outlook from the Fed. Adding 0.7% today, silver rocketed 15% higher for the month to manage a quarterly increase of 0.5%.

Eurozone inflation fell by the most on record in March but core inflation, excluding volatile food and energy prices, continued to march higher. The mixed inflation report led traders to believe the ECB will continue raising interest rates but not as aggressively as previously thought.

The dollar rose 0.4% against major rivals as the euro receded on the moderating rate outlook in Europe. A rising dollar weighs on gold by making it pricier in other currencies, limiting demand overseas.

But the buck's upside and gold's downside are likely to be severely limited. Residual instability in the banking system after the rapid failures and near-failures of several banks in recent weeks have driven investors strongly towards safe havens. And weaker US economic data, along with banking worries, are expected to nudge the Fed into ending the current rate hike cycle soon, and perhaps cut rates by year end.

After surging a full 2% in January, consumer spending increased by just 0.2% in February, suggesting that Americans are becoming more careful in the face of economic stress. Consumer spending comprises roughly 70% of US GDP.

Meanwhile, consumer sentiment tumbled to a three-low in March on recession worries, according to the University of Michigan index.

And inflation appears to be easing as the economy slows. The PCE index, the Fed's preferred measure, rose just 0.3% in February after jumping 0.6% in January, dropping the annual rate to 5%, the lowest in more than 18 months.

Benchmark 10-year Treasury yields pulled back under 3.5%, marking the biggest monthly drop since March 2020, as traders position themselves for the end of rising interest rates and the beginning of an economic downturn. Rate-sensitive 2-year yields fell to 4% for their sharpest monthly decline since 2008.

Lower yields are bullish for gold because they decrease the opportunity cost for holding it instead of bonds as a safe-haven asset.

Platinum picked up 0.6% today but fell 7.4% for the quarter. Palladium added 0.3% but tumbled 18% for the quarter.

At the Comex close: June gold slipped $11.50, or 0.6%, to settle at $1,986.20; May silver gained 17 cents to $24.16; July platinum picked up $6.20 to $1,003.10; and June palladium rose $4.40 to $1,468 an ounce.