Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold slid 0.5% to close at a 15-week low under $1,209 as mildly upbeat U.S. factory data reinforced the view that the Fed may raise interest rates in coming months.

Manufacturing expanded slightly for the third straight month in May, according to the ISM, lending subdued hope to a sector that has been lagging the rest of the economy. Factory output has been constrained by the strong dollar and weak demand at home and abroad.

Factories elsewhere in the world were similarly sluggish, with JPMorgan's Global PMI registering 50 for May, balanced precisely between expansion and contraction.

Other U.S. data also signaled moderate improvement, with the Fed's Beige Book reporting "disappointingly stable" growth across the 12 Fed regions. Consumer spending, wages, and employment all expanded at modest rates.

The Atlanta Fed cut its real growth forecast in Q2 to 2.5%, down from 2.9%, because of slow expansion in manufacturing. But with growth increasing, if only moderately, after the first quarter's meager 0.9%, the Fed has telegraphed its clear intention to tighten monetary policy at one of its upcoming meetings. Today's data did little to change that view.

The other precious metals were mixed, with silver and palladium adding 0.2% while platinum fell 0.8%.

At the Comex close: June gold slid $6 to $1,208.80; July silver added 3 cents to $16.02; July platinum lost $8.10 to $972.30; and September palladium edged up $1.25 to $548.10 an ounce.