Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold inched 0.3% lower after the World Bank downgraded its growth forecast for China from 8.2% to 7.7% this year. The news discouraged risk appetite, pushing global equities lower and rallying the dollar, which weighed on the gold price. The slowdown in China is seen as a consequence of shrinking exports and official efforts to reduce inflation by deflating China's property bubble. The World Bank added that growth could rise back over 8% next year if China follows through on planned stimulus programs. The other precious metals fell harder than gold for a second consecutive session, with silver dropping 1.6%, platinum 0.5%, and palladium 0.9%

At the Comex close: December gold slipped $5.10 to $1,775.70; December silver dropped 55 cents to $34.02; January platinum lost $8.40 to $1,698.80; and December palladium fell $6.25 to $656.95 an ounce.

Eurozone finance ministers began a two-day meeting in Luxembourg today to discuss Greece, Spain, and the growing debt crisis. While few decisions are expected, the group did formally launch its $650 billion permanent bailout fund, the European Stability Mechanism. Intended to replace the temporary European Financial Stability Facility, which bailed out Ireland, Portugal, and Greece, the ESM will be able to recapitalize banks with loans and credit lines, provide loans to governments, and buy bonds.

With demand for gold bullion building again, Bloomberg reported today that holdings in gold-backed exchange-traded products (ETPs) rose to a new record of 74.725 million ounces as of last Friday, more than the reported gold reserves of Switzerland and China combined. Investors have added net 5.7 million ounces this year, and 4.5 million in the past two months alone. This trend is expected to continue because of global monetary easing and increased demand in India, the world's largest gold-consuming nation. Physical gold sales to India rose last week to their highest level since last April, as the rupee firmed and India's festival and wedding season is set to begin. The festivals of Diwali and Dhanteras are traditionally celebrated with purchases of gold for gifts and dowries.