Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Washington— Following last week's 1.2% rise, gold slipped 0.5% today to close at $1,183 as soft U.S. data was trumped by a stronger dollar, diminishing demand for alternative assets.

The dollar rallied against major rivals as negotiations dragged on between the Greece and its EU creditors, deepening concerns about possible default. While the broke nation has reportedly started a repayment schedule with the IMF, it appears to have no credible plan for achieving the fiscal reforms needed to qualify for additional aid, without which it cannot remain afloat.

The dollar was also supported by a falling yuan after China loosened monetary policy yet again, cutting deposit rates for the third time in six months. The new round of easing is intended to stimulate lending and overcome the biggest slowdown in the Chinese economy since the financial crisis. A stronger dollar weighs on gold and other commodities by making them more expensive to foreign buyers.

Gold's slide was stemmed by more soft U.S. data. The New York Fed said consumers are increasingly skeptical about the strength of the economy, with expectations for future spending falling to a 22-month low. And the Fed's index of labor market conditions was negative for a second straight month despite the higher (though still disappointing) nonfarm payrolls numbers for April, released last Friday.

The other precious metals fell further than gold, with silver losing 0.9% while platinum and palladium dropped 1.4% and 2.7%, respectively. Widely used in automotive catalytic converters, the PMGs were pressured by reports that monthly vehicle sales fell again in China, the world's largest auto market.

At the Comex close: June gold slipped 5.90, to $1,183; July silver fell 15 cents to $16.31; July platinum dropped $16.20 to $1,127.30; and June palladium lost $21.90 to $780.45 an ounce.