Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold edged up 0.1% for a weekly gain of 0.2% as weaker economic data and Janet Yellen's dovish confirmation testimony increased speculation that the Fed will refrain from tapering monetary stimulus in the near future. Signaling that the recovery has lost a step, U.S. industrial output fell in October; factory activity slowed and employment dropped in the New York Fed region this month; and the ECRI gauge of U.S. economic growth contracted last week. The dollar slipped on the softer data, supporting higher prices for gold and other commodities that are denominated in dollars.

Gold traders are now at their most bullish in six weeks after Fed Chair nominee Janet Yellen testified yesterday that she plans to press on with quantitative easing, the Fed's program of buying $85 billion in long-term securities each month to promote growth and reduce unemployment. Speaking to the Senate Banking Committee, Yellen dismissed the idea that QE is creating asset bubbles, saying she doesn't see "evidence at this point, in major sectors of asset prices, of misalignments." QE supports higher gold and equities prices by flooding the markets with liquidity, devaluing the dollar, and increasing the risk of long-term inflation.

U.S. and global equity markets extended their rallies on the promise of continued stimulus while the other precious metals were mixed. Silver inched slightly higher but finished the week with a 2.8% loss. Platinum dropped 0.4% for a weekly loss of 0.3%, while palladium fell 1% for the day and 3.3% for the week.

At the Comex close: December gold gained $1.10 to $1,287; December silver added a half-cent to $20.72; January platinum lost $5.20 to $1,438.90; and December palladium dropped $7.15 to $732.65 an ounce.

The U.S. Mint announced this week that sales of one-ounce Silver Eagle bullion coins have already reached a new annual record at more than 40 million ounces. Investment demand for silver bullion has skyrocketed because of concerns about the inflationary effects of global monetary stimulus and the fragile state of the world economy, creating supply shortages. In a report released last week, consultancy Thomas Reuters GFMS forecasts 19% growth this year in demand for silver bullion coins.