Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.3% to close near $1,295 as renewed concerns about U.S. fiscal and trade policies depressed the dollar and boosted demand for safe havens.

Speaking last night at a campaign-style rally in Arizona, President Trump threatened to shut down the government if he doesn�t get funding for his promised wall along the Mexican border. Congress must pass a spending bill, which the President could veto, and raise the debt ceiling by the end of September to prevent the shutdown and default on US debt obligations.

The president also renewed his verbal attacks on NAFTA and senators in his own party, including majority leader Mitch McConnell, raising new uncertainty over the passage of his pro-growth agenda.

Capital markets were shaken by the hardline positions, dragging equities lower and effectively stopping yesterday's bullish momentum. The Dow lost 0.3% while the S&P 500 and Nasdaq slid 0.2%. Treasury's rose alongside gold on flights to safety, pressuring yields.

The dollar lost 0.3% against major rivals led by the Swiss franc and Japanese yen, which are viewed as safe-haven currencies. A weaker dollar typically supports gold and other commodities denominated in it for international trade by making them less expensive overseas.

Soft economic data also weighed on risk appetite. Home sales fell in July to a seven-month low and manufacturing stumbled, with the Market flash PMI dropping to a two-month low. On a positive note, Markit's services PMI edged up to a 28-month high.

The other precious metals were mostly higher, with silver and palladium adding 0.4% and 0.5%, respectively, while platinum inched down 40 cents.

At the Comex close: December gold rose $3.70 to $1,294.70; September silver climbed 6 cents to $17.05; October dipped 40 cents to $980.90; and September palladium added 65 cents, to $933 an ounce.