Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold slid 0.5% to close under $1,186 in choppy trade as upbeat data on the U.S. services sector offset a weak private payrolls report to boost the dollar and lessen demand for alternative assets.

Early in the session, gold pushed as high as $1,092 as ADP reported merely 185,000 jobs added by private employers in July. Substantially below forecasts, it was the smallest monthly increase since April and diminished expectations for a strong nonfarm payrolls report, due on Friday.

The dollar initially fell on the disappointing jobs data as traders speculated that it may cause the Fed to be less inclined to raise interest rates in September. Weakness in dollar supports gold and other commodities denominated in the currency for international trade by making them less expensive overseas.

The dollar was further pressured by comments from Fed Governor Jerome Powell declaring the central bank has made no decision yet on whether the raise rates in September. Powell's emphatic statement was seen as a pushback against yesterday's comments from Dennis Lockhart of the Atlanta Fed, who said that a September rate was in the cards barring "a significant deterioration in the economic picture."

Later in today's session, however, the dollar rebounded and gold retreated after the ISM reported that the U.S. services sector expanded in July to the highest level in almost a decade.

The other precious metals were also lower, with platinum and palladium losing 0.8% and 1%, respectively, while silver edged down less than 0.1%.

At the Comex close: December gold slid $5.10 to $1,085.60; September silver dropped one cent to $14.55; October platinum fell $7.60 to $950.90; and October palladium surrendered $5.60 to $593 an ounce.