Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.4% to close above $1,317 after weak factory data weakened the dollar and equities, boosting demand for alternative assets.

The ISM reported U.S. manufacturing contracted in August for the first time in six months, raising fresh doubts about the strength of the economy. Accounting for 12% of GDP, manufacturing remains hamstrung because of weak demand for U.S. exports owing to the strong dollar and slow global growth. The IMF signaled today that it is likely to cut its forecast for 2016 global growth yet again, largely because of weak trade.

The S&P 500 dropped 0.3%, pressured by the weak ISM data. Oil fell for the fourth straight session, dropping another 3%, after Russia suggested it may not participate in OPEC's likely plan to stabilize production.

The dollar decline by 0.3% as traders speculated that the Fed may now be less likely to raise rates when it meets later this month. Fed Chair Janet Yellen said last week that improvements in the jobs market have strengthened the case for higher rates, depending on incoming data.

While tomorrow's release of the crucial nonfarm payrolls report could tip the scales in favor of September hike, traders continue to view the December meeting as most likely, if a hike comes this year at all, according to CME FedWatch.

The other precious metals were mixed, with silver climbing 1.3% while platinum and palladium dropped 0.4% and 1.2%, respectively.

At the Comex close: December gold gained $5.70 to $1,317.10; December silver added 24 cents, to $18.94; October platinum slid $4.60 to $1,048.90; and December palladium lost $8.25 to $661.70 an ounce.