Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold fell 0.6% to close below $1,267 as downbeat oil sentiment and upbeat U.S. data reduced demand for alternative assets. The metal traded as high as $1,277 earlier in the session before falling back with declining oil prices.

Oil futures fell around 1.6% to a three-week low, dropping under the psychologically-important $50-per-barrel mark, as hopes faded for an OPEC agreement to curtail production when it meets in December. A report that U.S. crude supplies fell more than expected last week gave a temporary boost to oil prices mid-session, also rallying gold, which often trades in sympathy with oil as a hedge against energy-inflation, before both commodities fell back on OPEC pessimism.

The dollar rose against oil-dependent currencies, especially the Mexican peso and Russian ruble. But it fell against the euro on the strength of ECB chief Mario Draghi's recent statement that negative interest rates in the Eurozone will not go on for much longer. Overall, the buck dipped 0.1% against major rivals, resulting in little net influence on gold today.

U.S. housing and trade data was unexpectedly positive, suggesting the possibility of stronger Q3 growth than previously forecast. Sales of new single-family homes rose 3.1% in September, adding heat to a cooling housing market. And the trade deficit for finished goods decreased, signaling better prospects for U.S. exports.

The other precious metals also declined, with silver dropping 0.9% while platinum and palladium lost 0.1% and 2.2%, respectively.

At the Comex close: December gold fell $7 to $1,266.60; December silver dropped 15 cents to $17.63; January platinum edged down 90 cents to $964; and December palladium shed $13.90 to $620.95 an ounce.