Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold dipped 0.2% to close under $1,154 as rising risk appetite from Greece's debt deal overcame surprisingly weak U.S. retail sales data, reducing demand for alternative assets.

Retails sales contracted by 0.3% in June after expanding for four straight months, the Commerce Department said today, while totals for May and April were revised lower. Households cut spending almost across the board, both in stores and online, with substantial reductions in purchases of autos, clothing, and home furnishings.

Following June's disappointing nonfarm payrolls report and recent upticks in jobless claims, the weak retailing data raises questions about prospects for economic growth in Q3, further clouding the outlook for a rate hike from the Fed in September. Some clarification about the Fed's timing may come this week as Fed Chair Janet Yellen presents her semiannual testimony on monetary policy before Congress.

Still riding optimism from yesterday's deal between Greece and its international creditors, equities rallied again, driving the Dow and Global Dow more than 0.5% higher. The dollar rolled back against a basket of rivals, however, and U.S. Treasury prices rose on the softer data, helping to backstop gold's slide.

China is on pace for record-high gold deliveries from Shanghai this year, suggesting that bullion demand in the world's largest gold consuming nation is rebounding after a pullback last year. The recent collapse in Chinese stock markets is helping to boost bullion sales during the typically slow summer months, according to Mineweb. Voracious Chinese demand is expected to increasingly influence the global gold price in coming years.

The other precious metals also fell, with silver dropping 0.9% while platinum and palladium lost 0.7% and 0.3%, respectively.

At the Comex close: August gold dipped $1.90 to $1,153.50; September silver dropped 14 cents to $15.315; October platinum lost $7.60 to $1,028.40; and September palladium edged down $1.85 to $657.10 an ounce.