Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold finished 0.1% higher at just under $1,399 in a volatile session, tugged between improving prospects for monetary easing on one hand and reduced Asian gold imports on the other. ADP's private payrolls report came in lower than expected after U.S. companies added only 135,000 jobs last month, well below most projections. The Fed's Beige Book reported the economy expanding at a "modest to moderate" rate, also lower than expected. Combined with this week's abysmal ISM report showing factory orders in contraction for the first time in four years, the weak data raised speculation that the Fed will maintain quantitative easing at current levels. QE is bullish for gold because it devalues the dollar and increases the risk of long-term inflation.

Gold initially rose as high as $1,410 but came under pressure with reports that China's gold imports from Hong Kong fell by nearly 100 tons in April, to 125 tons, despite lower prices. The world's second largest consumer of gold, China imported more than 223 tons of gold in March, a new record. In addition, India increased taxes on bullion in an effort to curb demand and reduce its record-high current-account deficit. Physical demand in India, the world's biggest gold buyer, hit staggering levels in April and May, prompting this action. The other precious metals also finished higher, with silver rising 0.3%, platinum 1.3%, and palladium 0.7%

At the Comex close: August gold added$1.30, to $1,398.50; July silver picked up 6 cents, to $22.47; July platinum gained $19.50 to $1,510.60; and September palladium rose by $5.40 to $756.45 an ounce.