Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold slid 0.3% to close near $1,285 as upbeat U.S. data strengthened the dollar. But the metal quickly reversed those losses after hours, jumping as high as $1,292 in electronic trade after reports of a major build-up of troops on the Ukrainian border by Russia triggered safe-haven buying.

The ISM services index rose to the highest level since late 2005 and factory orders rose 1.1% in June, suggesting that the economy is gaining momentum. The dollar rose against major rivals and U.S. Treasury yields increased on speculation that the Fed will come under pressure, despite last week's disappointing non-farm payrolls report, to raise benchmark interest rates sooner because of improving economic conditions. A rising dollar pressures gold and other commodities denominated in the currency for international trade.

Momentum shifted after hours, however, on reports that Russia may be preparing for an invasion of the Ukraine under the guise of a "peacekeeping mission." The New York Times reports that Putin has amassed 20,000 battle-ready troops with artillery and air defenses within a few miles of the border, many wearing insignias of humanitarian relief. Declaring today that the conflict is becoming a "humanitarian crisis," Russia appears ready to intervene if Ukrainian forces have more success against pro-Russian rebels. U.S. equity indexes fell while Treasuries and gold erased losses on flights to safety.

The other precious metals fell harder than gold during regular trade and did not enjoy the safe-haven bounce after hours. Silver dropped 1.9% to a six-week low while platinum and palladium lost 0.7% and 0.8%, respectively.

At the Comex close: December gold slid $3.60 to $1,285.30; September silver dropped 40 cents to $19.83; October platinum lost $10.70 to $1,455.90; and September palladium shed $6.75 to $848.35 an ounce.