Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold jumped 1.2% to close at a three-week high above $1,262 as rising oil and a falling dollar boosted demand for alternative stores of value. The metal has now risen by more than 4% over the past four sessions.

Oil futures rallied sharply, with the U.S. benchmark West Texas Crude nearing an 11-month high above $51.20, as supply disruptions and rising Chinese demand buoyed the global outlook. In addition, U.S. inventories fell by more than 3.6 million barrels.

The dollar fell to a five-week low against major rivals as higher oil prices supported energy-dependent currencies. The buck was also weakened by speculation that the Fed will refrain from rate hikes until autumn or later because of the dismal employment data released in recent days.

After Friday's terrible nonfarm payrolls report, which showed just 38,000 jobs added in May, the Fed's index tracking 19 employment indicators was negative for the fifth straight month in May, marking the weakest stretch since the Great Recession in 2009. An employment gauge from the Conference Board also fell last month, suggesting job growth will remain anemic through the summer.

Investment appetite for physical gold has increased as the odds of a summer rate hike have receded. The Gold Investment Index run by the UK's Bullion Vault reached its highest level in three years in May, with June demand remaining strong as well.

The other precious metals also finished higher, with silver surging 3.7% while platinum and palladium added 1.3% and 1.6%, respectively.

At the Comex close: August gold jumped $15.30 to $1,262.30; July silver surged 60 cents to $16.99; July platinum gained $12.60 to $1,012; and September palladium added $9.05, to $561.20 an ounce.