Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.2% to close near $1,246 as the dollar and equities slumped, boosting demand for alternative assets.

The Dow dropped nearly 0.3%, led by weakness in energy shares after oil plunged another 3%. U.S. crude futures dropped to just over $42 per barrel on rising worries that the global supply glut will persist into next year.

The dollar rolled back 0.2% against major rivals as the pound rebounded on signs that the Bank of England will consider the gradual removal of monetary stimulus later this year. A falling dollar typically supports gold and other commodities by making them less expensive in other currencies.

The buck was also pressured by dovish comments from two prominent Fed officials. Patrick Harker of the Philadelphia Fed said the central bank will consider shrinking its $4.5 trillion balance sheet in September, pausing rate hikes while the reductions begin.

Yesterday, Chicago Fed President Charles Evans said he may not support another rate hike this year because of soft inflation data.

The other precious metals were mostly higher, with platinum and palladium rising 0.6% and 1.1%, respectively, while outlier silver dropped 0.3%.

At the Comex close: August gold gained $2.30 to $1,245.80; July silver dropped 4 cents to $16.37; July platinum added $5.50, to $927; and September palladium climbed $9.30 to $876.45 an ounce.