Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold dipped 0.1% to close under $1,279 as US threats to escalate a trade war with China boosted the dollar and yen, limiting the metal's safe-haven appeal.

President Trump is seeking an additional $200 billion in tariffs on Chinese goods, escalating friction between the world's two largest economies after China promised to retaliate for last Friday's announcement by the US of $50 billion in tariffs against it.

The Dow plunged more than 1% on the growing trade-war fears while Treasury notes rallied, helping to lift the dollar 0.3% against major rivals. Because Treasurys must be purchased in dollars, foreign investors have to exchange other currencies into greenbacks, bidding up the dollar's relative value. A rising dollar weighs on gold and other commodities by making them more expensive overseas.

Within the basket of currencies composing the Dollar Index, only the yen and Swiss franc strengthen, being viewed as safer-havens. The euro weakened after Mario Draghi, president of the ECB, said the Eurozone still needs significant monetary policy accommodation to support inflation. Last week, the ECB said quantitative easing would end in December, but Draghi said today that the bond-buying program could be extended if necessary.

The other precious metals were also lower, with silver sliding 0.7% while platinum and palladium lost 2.2% and 2.3%, respectively.

At the Comex close: August gold dipped $1.50 to $1,278.60; July silver lost 12 cents to $16.32; July platinum fell $19 to $864.90; and September palladium shed $22.60 to $ 960.30 an ounce.