Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold inched 0.1% lower after a strong U.S. factory report and dovish comments from the ECB and Bank of England boosted the dollar. The ISM manufacturing index surged nearly 5% to a two-year high in July, far surpassing expectations, and jobless claims receded to a five-year low last week. The positive data underscores the possibility that the Fed will begin tapering quantitative easing sometime later this year. Tantamount to printing money, QE has devalued the dollar increased the long-term risk of inflation, supporting higher gold prices.

The dollar was further supported after the ECB and Bank of England left interest rates unchanged and reassured investors that rates will remain extremely low for the foreseeable future, knocking the euro and pound substantially lower. A rising dollar pressures the gold price in part because gold is denominated in dollars internationally and becomes more expensive for holders of other currencies. The other precious metals mixed, with silver slipping half a cent while platinum and palladium added 1% and 0.8%, respectively.

At the Comex close: December delivery dipped $1.80 to $1,311.20; September silver slipped half a cent to $19.62; October platinum gained $14.50 to $1,443.80; and September palladium picked up $5.50 to $731.85 an ounce.

Melbourne-based ANZ Banking Group will open a second bullion vault in Asia catering to exploding demand for physical gold among investors. The 50-ton facility will hold up over $2 billion in gold bullion at current prices. Through its office in Singapore, ANZ reported distributes 15% of the world's primary gold production to clients including central banks, sovereign wealth funds, and asset managers. It is forecasting gold prices to rise above $1,400 this year and $1,500 next year because of tightening supplies, prices below production costs, and central-bank buying.