Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gold slipped 0.4% to close just above $1,270, as upbeat U.S. economic data boosted the dollar and eroded demand for alternative stores of value.

The ADP reported 253,000 jobs were added to private payroll in May, far surpassing forecasts and raising expectations for a strong U.S. nonfarm payrolls report, due on Friday. In addition, The ISM said manufacturing picked up slightly after slowing for two months.

The dollar rebounded by 0.2% on the upbeat data as traders speculated that the Fed will almost certainly raise interest rates when it meets again later this month. CME FedWatch now puts the odds of a quarter-point hike in June at 92%. Fed Governor Jerome Powell reinforced the hawkish rate view by saying the central bank should proceed toward normal monetary policy despite some weak recent inflation data.

Rising rates typically support the dollar by attracting foreign exchange investment seeking higher yields. A strong dollar, in turn, can pressure gold and other commodities by making them more expensive in other currencies.

The other precious metals were mostly lower, with silver and platinum dropping 0.7% and 2.2%, respectively, while palladium added 0.9%.

At the Comex close: August gold fell $5.30 to $1,270.10; July silver lost 13 cents to $17.28; July platinum dropped $21.30 $929; and September palladium gained $7.15 to $823.10 an ounce.