Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold surged 2.4% to close at a two-week high above $1,203 as a weaker dollar and concerns about Greece spurred safe-haven demand.

The dollar retreated against major rivals, supporting higher prices for gold and other commodities denominated in it for international trade, as a string of weaker economic data increased the likelihood that the FOMC, meeting tomorrow, will be less inclined to raise interest rates soon.

Growth in the U.S. services sector slowed in April, according to Markit's initial PMI. The news follows last week's report of sharply lower factory activity, plunging new-home sales, and rising jobless claims. The economy's slow beginning to the second quarter follows the first quarter's sluggish growth, projected to be around 1%, and is expected to weigh on the Fed's policy decisions this week.

Gold was further supported by the lack of progress in talks between Greece and its international creditors. The beleaguered nation changed its negotiating team in hopes of scoring more bailout funding before it runs out of cash in mid-May. Default could result in Greece's departure from the Eurozone and the possibility of debt-contagion damaging region's the fragile economy.

The other precious metals were also strongly higher, with silver jumping 4.9% while platinum and palladium gained 2.9% and 1.6%, respectively.

At the Comex close: June gold surged $28.20 to $1,203.20; May silver jumped 76 cents to $16.39; July platinum gained $32 to $1,153.40; and June palladium added $12.20, to $782.45 an ounce.