Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.3% to close above $1,235 as surging physical demand in India and bargain-hunting supported higher prices ahead of this week's FOMC meeting, which concludes on Wednesday.

In a bullish sign, gold imports surged 176% last month in India as the government relaxed restrictions on purchasing the metal overseas. Imposed to control the nation's current account deficit, import duties severely curtailed Indian gold demand last year, undermining the world gold price. India is world's second-largest gold consumer, second only to China.

Gold's gains came despite a rising dollar, which gained further against the UK pound and euro as Scotland prepares to vote on independence. Dollar strength typically weighs on the price of precious metals and other commodities denominated in the currency for intentional trade by making them more expensive to buyers overseas. Forex traders also bid up the dollar ahead of this week Fed meeting, and will look for any signal that raise interest rates may rise sooner than expected.

Gold also received a modicum of safe-haven buying after intense fighting resumed in the Ukraine despite the official cease-fire between Kiev and pro-Russian insurgents. Holdings in iShares Silver Trust, the world's largest silver-backed ETF, jumped 1% last week to a record high as investors took advantage of lower prices to build their portfolios.

The other precious metals were mixed, with silver and palladium inching higher by less than 0.1% while platinum slipped 0.5%. At the Comex close: December gold gained $3.60 to $1,235.10; December silver added one cent, to $18.56; October platinum dropped $7 to $1,363.50; and December palladium rose 85 cents to $836.90 an ounce.