Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold dipped 0.3% to close at a two-week low under $1,313 as the dollar pushed higher on Brexit news and better manufacturing data, reducing demand for alternative stores of value.

British Prime Minister Teresa May said yesterday that she will pursue a sharp break from the European Union beginning in March 2017, with the goal of complete separation within two years. The news took currency markets by surprise as many expected protracted negotiations or even a repeal of the Brexit decision.

The dollar rallied 0.2% against major rivals and jumped to a 31-year high against the pound as traders shed the UK currency. The buck was also supported by ISM reports showing U.S. factories rebounded into slight expansion in August after falling into contraction in July. A rising dollar pressures gold and other commodities denominated in it for international trade by making it more expensive to foreign buyers

The greenback's gains were capped, and gold's slide stemmed, after U.S. construction spending faltered in August, dropping 0.7%, and two Fed GDP forecasts showed slower growth in the third quarter. The Atlanta Fed's GDPNow cut its forecast yet again to just 2.2%, down from 2.4% last week and 3.9% some five weeks ago. The weaker projection was confirmed separately by the New York Fed. The economy is now on pace to grow by less than 3% for the eleventh straight year, a record.

The other precious metals also fell, with silver dropping 1.8% while platinum and palladium lost 2.5% and 1.3%, respectively.

At the Comex close: December gold slid $4.40 to $1,312.70; December silver dropped 35 cents to $18.87; January platinum lost $25.40 to $1,009.10; and October palladium shed $9.70 to $711.80 an ounce.