Gold News & Info

Source: Bill Musgrave, American Gold Exchange

Austin— Gold fell 1.4%, closing at a two-week low just under $1,187, after stronger U.S. economic data boosted the dollar and reduced demand for alternative assets.

A key gauge of U.S. business spending rose for the second straight month in April, the Commerce Department reported, for its strongest two-month rise a year. Consumer confidence edged up in May, according the Conference Board, suggesting that the second quarter could see a rebound in consumer spending, which accounts for around 70% of GDP. And sales of new homes jumped nearly 7% last month after a sharp fall-off in March, adding to optimism about growth in the important housing sector.

U.S. and global equities plunged more than 1% and the dollar rallied surged around 1% as traders took to upbeat data to mean the Fed is on track to raise interest rates later this year despite the economy's poor showing during Q1.

The U.S. currency was also supported by Fed Vice Chair Stanley Fischer's comments in Tel Aviv reiterating Janet Yellen's recent statement that rates are likely to reach as high as 4% within four years. A stronger buck weighs on gold and other commodities denominated in it for international trade by making them more expensive to buyers outside the U.S.

The other precious metals tracked lower with gold. Silver dropped 1.8% while platinum and palladium lost 2.1% and 0.5%, respectively.

At the Comex close: June gold fell $17.10 to $1,186.90; July silver dropped 30 cents to $16.74; July platinum dropped $24.50 to $1,124.10; and June palladium slid $3.60 to $780.40 an ounce.