Gold News & Info

Source: Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.8% to finish above $1,146 as more disappointing economic data eroded the dollar and boosted demand for safe-haven assets. The metal has risen 3% over the last three sessions to close near a two-week high.

The U.S. trade deficit surged 15% in August as a strong dollar and plunging demand in foreign markets continued to hammer exports. Sales of U.S. goods abroad fell to the lowest level in three years as economies falter worldwide and central banks weaken their currencies to create competitive pricing advantages. The IMF today cut its global growth forecast for the second time this year, citing China's deepening slowdown and calling for more stimulus.

The bad trade news is the latest in a spate of disappointing data over the past week. The Labor Department reported on Friday that nonfarm employers added just 142,000 jobs in September, far below forecasts, and revised totals for the prior two months lower by 59,000. ISM surveys said manufacturing plunged into contraction in September, smothered by the dollar and falling exports, while the services sector slowed substantially to just above contraction.

The dollar fell 0.6% against major rivals as the accumulation of weak U.S. data caused traders to speculate that the Fed will postpone a rate hike until next year. The CME FedWatch calculator, which monitors trading in Fed funds futures, places the probability of a December increase at just 31%, down from 64% a month ago, whereas 55% of traders now expect the first hike in March 2015, up from 32% a month ago.

A falling dollar supports gold and other commodities denominated in it for international trade by making them less expensive to overseas buyers. The other precious metals also gained, with silver adding 1.3% while platinum and palladium picked up 2.7% and 2.6%, respectively.

At the Comex close: December gold gained $8.80 to $1,146.40; December silver climbed 20 cents to $15.91; October platinum jumped $24.50 to $935.60; and December palladium added $17.75 to $706.95 an ounce.