(Sponsored Content) New York spot gold surged 1.4% to close above $2,331 last Friday as more evidence of cooling inflation boosted rate cut hopes, pressuring Treasury yields and lifting alternative assets. The metal rose 1.4% for the week for its first weekly advance in a month. Silver picked up 1.4% Friday to finish at $29.40, but ended the week down 5.9%, writes Bill Musgrave with Dana Samuelson, vice president and president, American Gold Exchange Inc.

In another sign of fading inflation, the cost of imported goods fell 0.4% in May, the biggest drop since last December, led by easing gasoline prices. The 12-month inflation rate for imports dipped to 1.1%. The cost of exported goods declined 0.6% for May.

Following last week’s reports showing flat consumer prices and falling wholesale prices in May, the data on imports reinforced the emerging narrative that the mini surge in inflation of the first four months of the year is turning around. That could give the Fed confidence to begin cutting interest rates this fall.

At its June policy meeting, the Fed revised its quarterly forecast down to a single rate cut this year. But Fed Chair Powell went out of his way to stipulate that further evidence of cooling inflation would likely change that outlook.

Fed fund futures traders now see a 66% chance of a September rate cut of 25 basis points, with a second reduction before the end of the year.

Benchmark 10-year Treasury yields fell for a fourth straight session, dropping to just above 4.2%, the lowest level since March. Lower yields support gold by decreasing the opportunity cost for holding it instead of bonds for safety.

Adding to demand for safe-haven assets, consumer sentiment tumbled in June to its lowest level in seven months, according to the University of Michigan survey. Political turmoil in France also added to flight to safety buying after President Macron called for a snap election following the unexpected victories by hard-right politicians in a recent Assembly election.

Platinum picked up 0.4% Friday, but fell 1.4% last week. Palladium added 2.4%, but declined 2.2% for the week.

At the New York spot close: Gold gained $31.20 to $2,331.40; silver rose 41 cents to $29.40; platinum picked up $4 to $958.60; and palladium rose $20.80 to $898.20 an ounce.

To learn more about American Gold Exchange, please visit Amergold.com