Gold News & Info

Source: Bill Musgrave, American Gold Exchange

Austin— After surging 1.9% on Friday, when bargain-hunters swooped in during light post-holiday trade, gold gave back 1.1% today to settle just under $1,192 as a stronger dollar pressured commodities.

The dollar touched a five-year high on follow-through from a spate of upbeat U.S. economic data in recent weeks. Revised GDP of 5% in the third quarter and consumer sentiment reaching a seven-year high in December have caused traders to speculate that the Fed will begin to raise interest rates by the middle of next year if not before. Higher rates will strengthen the dollar and weigh on gold and other commodities denominated in it for international trade.

Gold's losses were mitigated safe-haven demand after Greece was unable to elect a new president after three elections. Greece's political turmoil puts the terms of its bailout by the ECB at risk, raising the specter of possible default and exit from the euro. A similar threat in 2009 spread fears of financial contagion and the possible dissolution of the Eurozone.

Gold imports into China rose in November to the highest level since February as falling prices and growing concerns about the yuan are stoking demand for physical bullion in the world's largest gold-consuming nation. Net gold imports rose to 99.1 tonnes last month from 77.6 in October, according to the Hong Kong Census and Statistics Department.

The other precious metals tracked lower with gold. Silver dropped 2.3% while platinum and palladium lost 1.4% and 0.8%, respectively.

At the Comex close: February gold surrendered $13.40 to $1,181.90; March silver dropped 37 cents to $15.78; April platinum lost $17.20 to $1,202.70; and March palladium slid $6.60 to $812 an ounce.