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


6/8/2021: Gold dips ahead of CPI release

Source: Bill Musgrave, American Gold Exchange

Austin — Gold dipped 0.2% to close under $1,895 despite falling Treasury yields as the dollar ticked up ahead of tomorrow's CPI release, undercutting alternative stores of value. The metal had risen above $1,906 in intraday trade before profit-taking caused its first decline in three sessions.

Most markets were little changed as investors await the new inflation data to gauge the direction of monetary policy. A sharply elevated Consumer Price Index print for May could conceivably offset last Friday's soft jobs report and encourage the Fed to begin tightening ahead of schedule, or so traders speculate.

The dollar rose 0.2% against major rivals but remained near multi-month lows as Forex markets positioned for the possibility rising inflation. The concern is that the Federal Reserve could change its forward guidance about raising interest rates, which they have repeatedly pledged to keep near zero through 2022, if prices rise dramatically.

Higher interest rates tend to lift the dollar by making it more attractive to currency investors seeking higher yield, pressuring gold and other commodities in turn by making them more expensive overseas.

While Fed officials have been aggressive in asserting that any inflation spikes will be transient, due merely to a burst of pent-up demand as economies reopen, investors remain leery. Treasury Secretary Janet Yellen added to the angst today by suggesting higher interest rates could be beneficial.

Backstopping gold's slide, benchmark 10-year Treasury yield receded after data showing small businesses became less optimistic about their prospects in May, according to NFIB data. Falling yields help gold by reducing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The other precious metals were also lower, with silver dropping 1% while platinum and palladium each fell 1.1%.

At the Comex close: August gold slipped $4.40 to $1,894.40; July silver fell 29 cents to $27.72; July platinum dropped $12.30 to $1,162.50; and September palladium shed $30.70 to $2,807 an ounce.

  

Metal Ask      Change
Gold $2,219.81           Price Change Up Arrow $19.02
Silver $24.92           Price Change Up Arrow $0.10
Platinum $913.28           Price Change Up Arrow $2.92
Palladium $1,053.59           Price Change Up Arrow $25.00
In US Dollars