Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold slid 0.4% to close at $1,070 after a raft of mostly positive U.S. economic data reinforced expectations of a December rate hike, boosting the dollar and diminishing demand for alternative assets.

New home sales rebounded strongly in October, rising nearly 11% and helping to allay fears of a substantial slowdown in the key housing sector. Order for durable goods rose for a second month, jumping 3% in October, while orders for core capital goods, considered a proxy for business investment, also surged. And jobless claims fell more than expected last week, returning to 42-year lows.

On the negative side, consumer spending barely rose in October, inching up 0.1% after the same weak reading in September and casting doubt on the strength of fourth-quarter growth. Consumer spending accounts for 70% of GDP. The Atlanta Fed's GDPNow forecast model, considered the most accurate, downgraded Q4 growth to 1.8% in response to the spending report.

The dollar rebounded to an eight-month high behind the generally positive U.S. data as traders positioned for higher interest rates. The CME Fedwatch tool, which tracks Fed fund futures, places the odds of a December hike at 78%. Higher rates typically boost the dollar by attracting capital in search of higher yields. A stronger dollar, in turn, weighs on gold and other commodities by making them more expensive overseas.

The other precious metals were mostly higher, with platinum and palladium adding 0.2% and 1.8%, respectively, while silver finished unchanged.

At the Comex close: December gold slid $3.80 to $1.070; December silver was flat $14.16; December platinum added $2.20, to $843.90; and December palladium jumped $9.80 to $551.30 an ounce.