Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinClimbing for a third session, gold added 0.4% to close at $1,513 after weak U.S. services data deepened recession worries, stoking demand for safe havens.

The services sector slowed to a three-year low last month, according to the ISM survey, suggesting that the trade conflicts that have battered factories are beginning to damage the broader economy. Slowing in the services sector is more alarming, as it accounts for nearly 80% of GDP.

The report comes one day after the ISM said manufacturing contracted to the lowest level since 2009, setting off a wave of haven buying of gold and Treasurys as investors shed risk.

Ironically, Wall Street strengthened on today's downbeat data, with the Dow adding 0.4% and Nasdaq 1.1%, as traders speculated that the Fed is now more likely to cut interest rates for the third time this year when it meets again at the end of the month. CME FedWatch puts the odds of an October cut at 88%, up from 49% a week ago.

The dollar fell to a four-week low against the yen and a two-week low against the euro as traders shifted toward safety. A weaker dollar supports gold by making it less expensive in other currencies.

The other precious metals were mixed, with silver and platinum ending virtually flat while palladium lost 2.1%.

At the Comex close: December gold gained $5.90 to $1,513; December silver edged down less than a cent to $17.68; January platinum was unchanged at $894.40; and December palladium dropped $35.30 to $1,630.20 an ounce.