Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold slipped 0.3% to close under $1,173 after first-quarter U.S. GDP was revised slightly higher, boosting speculation that the Fed may raise interest rates in September, reducing demand for alternative stores of value.

The Commerce Department now says the economy shrank in the first quarter by 0.2%, slightly less than the 0.7% contraction it reported last month. The upward revision is due to stronger consumer spending, inventory accumulation, and business investment than the government previously estimated.

With stronger growth widely anticipated in the second quarter, traders are weighing the odds that the Fed will start raising interest rates in September. Yesterday, Fed Governor Jerome Powell put the likelihood at 50-50, and said two small hike could happen before year end if the economy strengthens enough. However, San Francisco Fed President John Williams said a few days ago that inflation remains too weak to raise rates.

U.S. and global equities retreated as talks stalled on Greek debt deal after EU finance ministers demanded changes to the reform package offered yesterday. The Tsipras government is already facing considerable opposition at home over proposed tax increases and pension reductions.

The other precious metals were mixed, with silver and platinum rising 0.7% and 0.6%, respectively, while palladium edged down less than 0.1%.

At the Comex close: August gold slipped $3.70 to $1,172.90; July silver gained 11 cents to $15.85; July platinum added $6.60, to $1,074.10; and September palladium dipped 5 cents to $695.70 an ounce.