Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold fell 1.1% to close just under $1,291 as upbeat manufacturing data in China and Europe boosted global equities and reduced safe-haven demand. Once prices fell below technical support at $1,300, automatic stop-loss selling carried the metal as low as $1,289 before bargain-hunting pulled it back above support at $1,290. After-hours trade furthered the rebound, stabilizing prices around $1,294.

Factory activity in China expanded at the fastest rate in 18 months in July, driven by deeper stimulus and rising domestic consumption of goods. Eurozone factories also showed unexpected strength after further ECB stimulus.

The PMI data suggests stronger GDP growth in the second half of the year for the world's second and third largest economies, and helped to rally equity indexes in Asia and Europe. However, the IMF lowered its forecast for global growth today because of weakness in China and the U.S., warning that rich nations are in danger of economic stagnation unless more steps are taken to create sustainable growth.

U.S. manufacturing also expanded but at a slower pace in July, with the PMI slipping more than a point from the prior month. New jobless claims improved, however, falling to and eight-year low and fueling speculation that the Fed will raise interest rates sooner than expected.

The dollar extended its gains, weighing on precious metals and other commodities denominated in the currency for international trade. Oil fell more than 1%. Silver tumbled 2.8%; platinum lost 0.9%; palladium slid 0.4%.

At the Comex close: August gold fell $13.90 to $1,290.80; September silver tumbled 58 cents to $20.42; October platinum lost $13 to $1,473.70; and September palladium slid $3.35 to $870.95 an ounce.