Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slipped 04% to close under $1,993 as yields and the dollar rose on relatively upbeat US economic data and expectations that the Fed will raise interest rates this week. The rallied above $2,015 in intraday trading before slipping back on profit-taking to finish at a one-week low.

The ISM manufacturing survey bounced higher in April, rising from a three-year low. New orders increased 1.4%, production added 1.1%, and the employment gauge lifted from a three-year low into expansion. The sector remained in overall contraction, however, for the sixth straight month.

Construction spending rose 0.3% in March, according to the Commerce Department, with nonresidential construction leading the way with an increase of 0.7%.

The better-than-expected data helped the dollar gain 0.5% against major rivals as traders speculate that the Fed will almost certainly increase interest rates at its two-day meeting, which starts tomorrow. Fed fund futures trading pegs the likelihood of a quarter-point hike at 92%, up from 84% yesterday. A stronger dollar weighs on gold by making it pricier in other currencies.

Benchmark 10-year Treasury yields also crept higher, pressuring gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven assets.

The metal rallied sharply early in the session after First Republic became the third major US bank to fail in the past two months. But news of JPMorgan Chase's acquisition of most of its assets quelled fears of contagion from the biggest baking crisis since 2008.

The other precious metals were mostly lower, with platinum and palladium dropping 2.3% and 4.2%, respectively, while silver was virtually flat.

At the Comex close: June gold slipped $6.90 to $1,992.20; July silver added a fraction of a cent, to $25.23; July platinum lost $25.40 to $1,064.70; and June palladium shed $63.10 to $1,446.80 an ounce.