Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold rose 0.5% to close above $1,994 as the dollar plunged on disappointing U.S. factory data and rising optimism that a Greek debt deal is within reach.

Orders for factory goods fell 0.4% in April after rising 2.2% in March, undermining faith in a manufacturing rebound. Orders have fallen in eight of the past nine months as demand for U.S. products overseas continues to be crimped by the strong dollar.

The IMF and EU appear to be reaching consensus with Greece on conditions for additional loans to keep the nearly bankrupt nation out of default. While the onus remains on Greece's new government to enact unpopular fiscal reforms, a significant breakthrough is expected in the multi-month impasse that has worried currrency markets about the future of the euro.

The euro spiked around 2% higher against the dollar, boosted by optimism about Greece and reports that Eurozone inflation edged up 0.3% in May, its first increase in six months. Meanwhile, the dollar plummeted 1.6% against a basket of rivals after softer data stoked new speculation that the Fed will refrain from raising interest rates until late this year. A weaker dollar supports demand for gold and other commodities denominated in it for international trade by making them less expensive to foreign buyers.

The other precious metals were mostly higher, with silver climbing 0.7% while platinum rose 0.9% and palladium slipped 0.5%.

At the Comex close: August gold gained $5.70 to $1,194.40; July silver picked up 12 cents, to $16.80; July platinum added $9.80, to $1,114; and September palladium slipped $4.05 to $768.70.