AGE Daily Gold Update

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

6/11/2021: Gold slides on dollar rebound

Source: Bill Musgrave, American Gold Exchange

Austin — Gold slid 0.9% to close under $1,880 after the dollar rebounded against the euro and pound, undercutting alternative stores of value. The metal finished the week down 0.7%.

After the ECB held rates unchanged at yesterday's meeting, a prominent policy maker admitted that will be "constrained" for years to come, knocking the euro down 0.6% in today's trading. Meanwhile, the pound fell an equal amount concerns that the vicious Delta variant of Covid, now spreading in the UK, will prevent the nation from reopening fully in coming weeks.

The dollar rallied 0.6% on expectations that interest rates in Europe and the UK are likely to stay low for even longer than in the US. A stronger dollar weighs on gold and other commodities by making them more expensive in other currencies, limiting overseas demand.

Benchmark 10-year Treasury yields were little changed, edging up two basis points but holding near three-month lows despite yesterday's sharply higher CPI data. Typically, rising inflation causes investors to sell lower-yielding bonds to protect the value of future coupon payments, which is eroded by a higher cost of living.

But bond traders have apparently accepted the Fed's repeated messaging that such bursts of inflation are merely "transitory," a result of pent-up demand because of Covid closures, and will not influence monetary policy. Next week's meeting of the FOMC will be scrutinized for any indication of concern about rising prices.

Consumer sentiment has picked up in June after falling in May, according to the University of Michigan survey, as worries about inflation edged down.

The other precious metals were higher for the day and mixed for the week. Silver climbed 0.4% for the session and 0.9% for the week. Platinum picked up 0.5% today but still lost 1.1% this week. Palladium rose 0.1% for a weekly loss of 2.2%.

At the Comex close: August slid $16.80 to $1,879.60; July silver added 12 cents, to $28.15; July platinum picked up $5.10 to $1,151.10; and September palladium edged up $3,10 to $2,780.80 an ounce.