Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold slid 0.6% to close under $1,172 as rising U.S. consumer confidence boosted speculation about a September interest rate hike, reducing the demand for alternative assets. Gold closed out the first half of the year down around 1%.

Consumer confidence jumped in June, according to the Conference Board, as U.S. households grow increasingly optimistic about the labor market. Following upbeat recent data on employment, consumer spending, and housing, the new report shows the economy rebounding the first quarter's dismal contraction of 0.2% in GDP.

The dollar rallied on the improving economic signs, gaining 0.5% against a basket of rivals as traders foresee the first rate rise from the Fed as likely in September. A strong dollar weighs on gold and other precious metals denominated in it for international trade by making them more expensive to users of other currencies.

Gold's slide was limited by safe-haven demand following reports that German PM Angela Merkel has rejected further negotiations with Greece until after the referendum on July 6, when Greek voters will decide whether to accept deeper austerity measures in exchange for additional bailout funds. Without new aid, Greece is likely default on its loans and exit the euro, triggering economic turmoil at home and throughout the region.

Purchases of physical gold, especially gold coins, has surged in recent days as investors in Europe and the U.S. seek safety from Eurozone turmoil. The British Royal Mint said demand from Greece doubled the five-month average last weekend after capital controls were place on Greek banks. The U.S. Mint reports sales of Gold Eagles hit the highest level since January this month.

The other precious metals were mostly lower on the day, and all closed the first half of the year with losses. Silver dropped 0.7% today and 0.1% this year. Platinum slipped 0.3% for a 10.8% loss year-to-date. Palladium added 0.9% today but still lost 15.8% this year.

At the Comex close: August gold slid $7.20 to $1,171.80; September silver dropped 11 cents to $15.581; October platinum slipped $2.80 to $1,079.50; and September palladium gained $6.20 to $672.65 an ounce.