Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold fell 0.9%, breaking a three-session winning streak, as weak global economic data lifted the U.S. dollar. Private-sector activity in Germany, the eurozone's growth engine, declined substantially in April while services and manufacturing contracted throughout the region for the fifteenth straight month. The euro fell on growing expectations that the ECB will be forced to cut interest rates and expand monetary easing because of worsening economic conditions.

Chinese manufacturing also slowed and U.S. factory output expanded at is slowest pace in six months, driving currency traders into the dollar as a safe haven. Despite the softer global data, risk appetite returned to Wall Street, with the Dow and S&P 500 both gaining more than 1%, which further pressured gold. Silver fell 2.2% while platinum and palladium each lost 1.3%

At the Comex close: June gold dropped $12.40 to $1,408.80; May silver lost 51 cents to $22.82; July platinum shed $19 to $1,417.80; and June palladium gave up $8.55 to $673.35 an ounce.

Goldman Sachs has withdrawn its recent recommendation to short the gold market, telling clients to close any remaining bets on lower gold prices. Goldman's call to short the market in a letter to clients on April 10 helped to trigger gold's 13% technical sell-off in ETFs and futures. Billlionaire John Paulson, whose hedge fund is the largest shareholder in the SPDR Gold Trust ETF, this week told his clients that ongoing central bank purchases and strong Asian demand will support higher gold prices in the near term, and global monetary easing will ultimately result in inflation, supporting much higher gold in the long term.