Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold gave up early gains to slide 0.5% and close under $1,830 after Fed Chair Jerome Powell struck an overtly hawkish stance in Congressional testimony, lifting the dollar and undercutting alternative stores of value.

Testifying before the House Financial Services Committee, Powell declared that the Fed’s commitment to controlling inflation is “unconditional” even if aggressive tightening means risking higher unemployment and the possibility of recession.

Testifying before the Senate committee yesterday, Powell had been somewhat more moderate, suggesting that outsized rate hikes were not a certainty and the Fed is striving for a “soft landing.”

The dollar rose 0.3% against major rivals after Powell’s comments as traders speculated that additional rate hikes of 75 basis points are almost inevitable. A rising dollar weighs on gold and other commodities by making them pricier overseas.

Gold had rallied above $1,849 earlier in the session on deepening concerns about a global recession, only to change course under pressure from a crusading Fed Chair and a higher dollar.

The US services sector fell to a five-month low in June while the manufacturing sector slid to a two-year low, according to S&P PMI reports. Germany and France also posted weak PMI data for June.

Citigroup is now forecasting a near 50% probability of global recession, citing monetary tightening by major central banks as an “increasingly palpable risk” for global growth.

Oil prices fell sharply for a second day, dropping another 1.9% as traders bet that the slowing global economy will mean decreased demand. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

Backstopping gold’s late-session slide, benchmark 10-year Treasury yields retreated under 3.1% as investors flooded toward the perceived safety of government debt. Falling yields support gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The other precious metals were also lower, with silver losing 1.8% while platinum and palladium fell 2.4% and 0.8%, respectively.

At the Comex close: August gold slid $8.60 to $1,829.80; July silver fell 38 cents to $21.04; July platinum dropped $22.50 to $904.40; and September palladium slipped $13.80 to $1,824.10 per ounce.