Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slipped 0.4% to close under $1,956 as traders took profits from last week's 1.7% rise, its biggest weekly gain since early April, and weak GDP data from China weighed on commodities.

China's economy grew 6.3% in the second quarter, falling short of forecasts, as falling global demand for goods, weakness in the domestic housing market, and rising youth unemployment sapped the strength of the world's second-largest economy.

Major investment banks like JPMorgan, Citi, and Morgan Stanley project China's GDP will decelerate further this year to around 5%. As China is the world's biggest manufacturer, slowing growth spells decreased demand for raw materials, which in turn would weigh on commodities markets.

Here at home, the Fed's Empire State factory index fell in July by more than forecast but managed to remain slightly above contraction.

While US economic data has been uneven and growth has slowed this year, Treasury Secretary Janet Yellen said today that she does not foresee a recession. Similarly, Goldman Sachs cut its recession probability to 20% from 25% because of falling US inflation.

Benchmark 10-year Treasury yields were little changed, and the dollar hovered around a 13-month low as weaker inflation raised hopes that the Fed will stop hiking interest rates after this month.

The June CPI released last week showed consumer inflation falling to an annualized 3% while the PPI showed wholesale inflation increased just 0.1% for the month.

The other precious metals were mixed, with silver sliding 0.7% while platinum and palladium rose 0.3% and 1.2% respectively.

At the Comex close: August gold dropped $8 to $1,956.40; September silver slid 18 cents to $25.02; October platinum added $3.20, to $987.50; and September palladium picked up $14.70 to $1,281.10 an ounce.