KITCO/Jim Wyckoff
Gold sees price gains as U.S. Treasury news quickly shaken off

Gold prices are moderately higher in morning U.S. trading Wednesday, after seeing a bit of brief selling pressure following news the U.S. Treasury said it may take extraordinary measures to fund the government if the federal borrowing limit is reinstated this summer. Treasury warned it could run out of cash sooner than in previous debt-limit clashes between lawmakers. The current suspension of the U.S. debt limit expires August 14. U.S. treasury bond yields rose on the news, helping to pressure the precious metals. However, bond yields have since backed off from their daily highs. June gold futures were last up $5.90 at $1,781.80 and July Comex silver was last down $0.008 at $26.545 an ounce.

Global stock markets were higher overnight. U.S. stock indexes are pointed toward higher openings when the New York day session begins, after selling off Tuesday.

The featured scheduled data point in the U.S. at mid-week is the ADP national employment report for April, which came in up 742,000—not far from the expected rise of 800,000 and compares to a gain of 517,000 jobs in March.

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CNN Business/Julia Horowitz, CNN Business
Janet Yellen just proved markets can’t handle the truth

When Treasury Secretary Janet Yellen speaks, investors listen. And on Tuesday, they didn’t like what they heard.

The details: At an event hosted by The Atlantic, Yellen, an economist who previously led the Federal Reserve, indicated that the central bank may need to hike interest rates to prevent prices from rising too quickly.
“It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat,” Yellen said.
Her comments rippled through markets, feeding a selloff in tech stocks that could take a beating when rates rise. She later clarified that she wasn’t predicting or making any recommendations to the Fed, whose independence she respects, and does not expect inflation to be a persistent, major issue.

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Bloomberg/David Westin and Simon Casey
Sam Zell Buys Gold With Inflation ‘Reminiscent of the ‘70s’

Billionaire investor Sam Zell is seeing inflation everywhere, and has bought gold as a hedge — something he says he used to knock others for doing.

“Obviously one of the natural reactions is to buy gold,” he said in a Bloomberg Television interview. “It feels very funny because I’ve spent my career talking about why would you want to own gold? It has no income, it costs to store. And yet, when you see the debasement of the currency, you say, what am I going to hold on to?”

Zell, 79, said he’s concerned not only about the U.S. dollar but other countries printing money as well, and questioned whether inflation will be transitory, as Federal Reserve Chairman Jerome Powell indicated last week.

“Oh boy, we’re seeing it all over the place,” Zell said of inflation. “You read about lumber prices, but we’re seeing it in all of our businesses. The obvious bottlenecks in the supply chain arena are pushing up prices. It’s very reminiscent of the ‘70s.”

You can watch the full video, here.

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