Gold News & Info

Source: Bill Musgrave, American Gold Exchange

Austin— Gold edged up for the second day, adding 0.1% to close just under $1,190, after U.S. GDP was revised to show the economy contracting in the first quarter for the second year in a row. The yellow metal gained 0.7% in May, its first monthly rise since January.

The Commerce Department reported today that GDP contacted by 0.7% in the first quarter, rather than expanding by 0.2% as previously thought. The drop-off came primarily from smaller inventory build-up and higher imports than earlier estimates. Perhaps more alarming, the same report showed corporate profits fell by 5.9%, the most in a quarter since the middle of the recession in 2008, after dropping nearly 2% the previous quarter.

Separately, consumer sentiment dropped in May to a six-month low, as measured by the University of Michigan Index, largely in response to reduced expectations for economic growth in Q2. And the Chicago PMI fell into contraction at 46.2 in May. Readings over 50 signal expansion.

Equities retreated after the soft data, with the Dow and Global Dow both losing around 0.5%. Risk appetite was further reduced by growing uncertainty over the outcome of Greece's debt problems after IMF Director Christine Lagarde asserted yesterday that a solution is "very unlikely" in the next few days and a Greek exit from the euro remains a possibility. U.S. Treasury bonds gained with gold on safe-haven inflows.

The other precious metals were mixed for the day and month. Silver rose 0.2% today and 3.6% In May. Platinum lost 0.4% on the day and 2% on the month. Palladium dropped 1.1% but finished May 0.2% higher.

At the Comex close: August gold edged up $1 to $1,189.80; July silver added 3 cents, to $16.70; July platinum lost $4.80 to $1,111.50; and September palladium dropped $8.50 to $777.10 an ounce.