Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold picked up 0.2% to close at $1,320 as lackluster U.S. economic data pushed the dollar to a five-week low against a basket of rivals, boosting demand for the metal as an alternative store of value. The metal finished the week 0.3% higher for a fourth straight weekly rise, its longest streak since January.

The ICE dollar index dropped 0.25% today to its lowest level since May 21, as traders digested this week's reports suggesting that the recovery is still falling short. GDP was revised lower yet again, to minus 2.9%, the sharpest decline in five years and one of the worst non-recession collapses ever. In addition, orders for durable goods fell unexpectedly in May and consumer spending was softer than forecast, prompting economists to downgrade growth forecasts for the second quarter.

The subpar data is leading many to believe that the Fed will hold interest rates near zero for longer than previous thought, perhaps until the end of next year, as Fed Chair Janet Yellen signaled last week. Low rates weigh on the value of dollar and support higher prices for precious metals, which are denominated in dollars for international trade and become less expensive for holders of other currencies when the dollar weakens.

The other metals were mixed on the day but higher for the week. Silver slipped 0.2% for a weekly rise of 0.6%. Platinum gained 0.6% for the day and 1.5% for the week. Palladium added 0.8% today for a 2.5% gain this week. The PMGs were boosted by the resumption of labor strife at major South African mines.

At the Comex close: August gold picked up $3 to $1,320; July silver dropped 3 cents to $21.08; July platinum gained $8.40 to $1,478.50; and September palladium rose to $842.85 an ounce.