Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold slipped 0.8% as mixed U.S. economic data combined with a tepid response to stimulus in Europe and China to drive safe-haven investors toward the dollar. U.S. retailers suffered their worst month since August 2009 as consumer confidence tumbled in June over high unemployment and low income growth. And the ISM services index grew at its slowest pace since January 2010, another sign that the recovery is faltering. Treasury prices rallied alongside the dollar on safe-haven inflows, pressuring gold's gains of more than 4% since last Friday. Silver fell 2.2% while sister metals platinum and palladium declined 0.9% and 2.2%, respectively.

At the close: August gold slipped $12.40 to $1,609.40; September silver fell 61 cents to $27.65; October platinum slid $13.70 to $1,477.70; and September lost $13.15 to $585.75 an ounce.

On the positive side of today's U.S. data ledger, ADP reported that private-sector employers added 176,000 in June, well above the expected 100,000. Despite the dismal retailing and ISM data, the ADP report was strong enough to damp expectations of more easing from the Fed, driving some speculative sentiment away from gold. If tomorrow's non-farms payrolls report comes in stronger than expected, speculators on QE3 will be further disappointed. Gold gained more than 85% during the first two rounds of quantitative easing.

Monetary easing was the rule of the day elsewhere, however. In a surprise move, China slashed interest rates for the second time in less than a month, trying to reinvigorate its slowing economy. The ECB also cut rates, as expected. And the Bank of England expanded its quantitative easing program by 50 billion pounds, also as expected. Monetary easing typically stimulates demand for risk assets and gold because it injects liquidity, devalues currencies, and increases long-term inflation risk. Today's policy actions, however, seemed primarily to underscore the risks in the global economy and spur investors into Treasurys.