AGE Daily Gold Update

AGE Daily Gold Update presents a recap on today's action in the precious metals markets. View archives.

7/2/2024: Gold dips on elevated yields

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold dipped 0.2% to $2,323 despite a downtick in the dollar and mildly dovish comments from Fed Chair Jerome Powell as Treasury yields remain elevated and traders await new data on unemployment. Silver added 0.2% to finish at $$29.35 an ounce.

Speak at an ECB forum in Portugal, Powell said the US economy is back on its "deflationary path" after inflation rebounded slightly during the first quarter of the year. However, he added that more data is needed to get "a true reading" of what is happening with underlying inflation.

Powell also acknowledged the risks of holding rates too high for too long, a theme that Chicago Fed President Austen Goolsby emphasized separately in comments to CNBC today. Citing "warning signs" in the economy, Goolsby said that real interest rates, adjusted for inflation, are already the highest in many decades, tightening monetary policy by more than the Fed intends.

This Friday's release of the government's nonfarm payrolls report for June should provide additional data on the direction of the economy and therefore the Fed funds rate.

The dollar slipped 0.2% against major rivals on the semi-dovish Fed talk, limiting gold's slide by making it cheaper overseas.

Benchmark 10-year Treasury yields also eroded slightly but hovered near a one-month high on Monday. High yields weigh on gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Platinum rose 2.6% while palladium jumped 4.9% on improving prospects for hybrid autos, which use the metal in catalytic converters.

At the New York spot close, gold dipped $4.60 to $2,323; silver added a nickel, to $29.35; platinum picked up $25.30 to $1,003.60; and palladium surged $47.80 to $1.021.60 an ounce.