Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold recouped 0.6% after a four-session slide, closing near $1,343 as a soft Fed Beige Book weakened the dollar and boosted demand for alternative assets. Silver jumped 1.2% to $20.41, its highest close in two years.

The anecdotal monthly survey of economic conditions in the twelve Fed regions, known as the Beige Book, showed "signs of softening" in consumer spending in June. Wage pressures were "modest to moderate" in most districts, suggesting inflationary pressure remains well under the Fed's target 2%.

With consumer spending comprising more than 70% of GDP, its slowing raises questions about the overall health of the economy entering the third and fourth quarters. Following yesterday's weak data on wholesale inventories for May, the Atlanta Fed cut its GDP forecast to 2.3% for the second quarter.

The dollar rolled back on the weaker data and traders speculated that the Fed will be even less inclined to raise interest rates soon. Dallas Fed President Robert Kaplan said today that since boosting growth is the most important issue facing the Fed, a "slow, gradual, careful" approach to future rate hikes is needed.

Gold and silver were was further supported by the expected return of quantitate easing to the UK. To soften Brexit fallout, the BOE is planning to revive the huge bond-buying program it last deployed in 2009 after the global financial crisis. Tantamount to printing money, QE floods the economy with cheap liquidity, boosting demand for alternative stores of value like gold and silver.

The other precious metals, platinum and palladium, gained 0.2% and 2.4%, respectively.

At the Comex close: August gold recouped $8.30 to $1,343.60; September silver jumped 24 cents to $20.41; October platinum picked up $2.30 to $1,100.20; and September palladium rose $15.25 to $644.20 an ounce.