The Daily Market Report: Gold Adds to Monday’s Gains, Reaching 3-Week Highs

28-Apr (USAGOLD) — Gold extended to the upside in early New York trading on Tuesday to establish new 3-week highs. The yellow metal was boosted by a surprise tumble in U.S. consumer confidence in April, which further eroded expectations of a Fed rate hike any time soon.

While there is growing speculation that the Fed will announce tomorrow its intention to forestall any rate hike, Treasury yields are actually up today. The dollar index however has slipped to an 8-week low, which is helping to underpin gold.

The advance report on U.S. Q1 GDP also comes out tomorrow, and it is widely expected to disappoint. Consensus is running around +1.0%, but there are plenty of whispers about a sub-1% print. The latest read on the Atlanta Fed’s GDPNow model is a mere +0.1%.

If GDP is a big miss, that’s when a more overtly dovish FOMC statement would be more likely. While the hawks are already calling for a Q2 rebound in growth, the data that has come out thus far don’t exactly inspire optimism.

There continues to be talk that some kind of compromise between Greece and its creditors is close at hand. Of course that rhetoric has been abundant for months, despite any material moves toward an actual deal. PM Tsipras says “Our goal… is to reach a first agreement this week if possible, or next week at the latest….I believe we are close.”

Next week would be after the month-end deadline that Greece agreed too. One has to wonder how long the creditors will actually play this game.