NEW YORK (MarketWatch) -- Gold and silver fell Wednesday as the U.S. dollar rose from a five-month low against the euro, after data showed the European economy shrank 2.5% in the first quarter. The dollar also benefited from new data that gave a mixed outlook for the services and manufacturing sectors of the U.S. economy. The dollar index (DXY 79.54, +0.04, +0.05%) rose Wednesday for the first session in five. A stronger dollar reduces gold's investment appeal. Gold for June delivery fell $18.70, or 1.9%, to $964.50 an ounce on the Comex division of the New York Mercantile Exchange. July silver fell 64.5 cents, or 4%, to $15.31 an ounce. The white metal touched a 10-month high of $16.25 in overnight trading. Meanwhile, copper declined for a second session, continuing its slide from the highest level in more than seven months. Copper for July delivery lost 8.55 cents, or 3.7%, to $2.212 a pound. The ADP employment index released Wednesday helped push copper lower after the index indicated the U.S. private sector continued to shed workers -- 532,000 jobs were eliminated in May. The number of job losses, however, was the smallest since November. The index data comes two days before the government releases its estimate of May nonfarm payrolls. Economists surveyed by MarketWatch are looking for payrolls to drop by 500,000 in the government survey, which would be the smallest decline since October. See full story. In other economic news, the Institute for Supply Management said business worsened in May in the nonmanufacturing sectors of the U.S. economy for the eighth consecutive month. The Commerce Department reported Wednesday that orders for U.S.-made factory goods rose 0.7% in April, less than predicted by economists surveyed by MarketWatch. Also on the radar, Federal Reserve Chairman Ben Bernanke told the House Budget Committee that the pace of the economy downturn is slowing and that he still expects a gradual recovery this year. See more on Bernanke. Despite Wednesday's losses, gold is still up more than 10% this year and silver is up 40%. "The dollar should continue its slide and gold its rally," said Zachary Oxman, managing director at TrendMax Futures. "Today it seems we are seeing some light trading, but I don't expect it to continue." Holdings in the SPDR Gold Trust , the biggest exchange-traded fund backed by gold, stood at 1,134.03 metric tons Tuesday, unchanged from a day ago, according to latest data from the fund. Holdings in the iShare Silver Trust, the biggest silver ETF, stood at 8,605.43 metric tons, slightly lower than the previous day's record high of 8608.54 metric tons. In other metals, July platinum fell $1.10, or 0.1%, to $1,244.50 an ounce, while the September palladium contract slid $8.75, or 3.5%, to $242.60 an ounce. Among metals-sector equities, shares of Barrick Gold Corp.) sank 3.5% to $36.57 and South Africa's Gold Fields Ltd. was down 8% at $12.61, while Newmont Mining Corp. dropped 3.8% to $46.61. The Amex Gold Bugs Index , which tracks the share prices of major gold companies, lost 5.9% to 374.40. The iShares Gold Trust ETF dropped 1.7% to $94.79, while the iShares Silver Trust ETF fell 3.6% to $15.18.

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