Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold slipped 0.6% to close under $1,365 as rising oil and some upbeat U.S. data boosted the dollar and spurred traders to take profits from the metal's rally to a two-year high yesterday.

The ISM said the U.S. services sector tapered off in July but still expanded at a solid pace, fueling optimism that GDP could pick up in the second half the year. Economist say the ISM data is consistent with 2% growth, which would improve on the 1% growth notched during the first two quarters. Hiring remained a soft spot in the service industries, according to the ISM, with the index hovering slightly above contraction at 51.6%.

Separately, ADP reported the private sector added 179,000 jobs in July, more than expected, suggesting that Friday's release of the more authoritative nonfarm payrolls report may also beat forecasts.

Oil prices jumped 3.3% to move back over $40 per barrel after government data showed a sizable drop in gasoline stockpiles last week. Rising energy shares pulled U.S. equities slightly higher.

The dollar rebounded 0.5% against a basket of rivals after falling to a one-month low on the heels of last Friday's anemic Q2 GDP report. A stronger dollar weighs on gold and other commodities by making them most costly to foreign buyers.

The other precious metals also fell. Silver led the way with a 1.1% drop while platinum and palladium slid 0.2% and 0.5%, respectively.

At the Comex close: December gold slipped $7.90 to $1,364.70; September silver dropped 23 cents to $20.47; October platinum dipped $2.50 to $1,169.60; and September palladium fell $3.85 to settle at $713.