Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold dipped less than 0.1% after nearing $1,700 in intraday trading as yesterday's Bernanke-inspired rally largely held its ground. The Dow traded 0.33% lower and the dollar index 0.3% higher as a spate of less-than-rosy economic data made risk assets less attractive. Still, gold bucked its recent trend of tracking equities as additional easing from the Fed looks increasingly possible. Silver lost 0.4% and palladium 0.9% while platinum gained 0.7%.

At the Comex close: April gold dipped 70 cents to $1,684.90; May silver lost 13 cents to $32.62; April platinum gained $10.80 to $1,657.50; and June palladium slid $5.75 to $663 an ounce.

In the March Conference Board survey, consumer confidence slipped because of a "less than favorable short-term outlook" for employment, according to Lynn Franco, director of the Conference Board�s consumer research. Consumers now expect inflation of 6.3% in the next year, up from 5.5% last month. And the S&P/Case-Shiller found that home prices dropped for the fifth straight month to the lowest level since early 2003. Robert Shiller, the renowned Yale economist behind the housing index, said today that the housing market might be in a �Japan-like slump that will go on for years and years,� and possibly �we will never in our lifetime see a rebound in these prices in the suburbs.� Housing and employment are two crucial aspects of recovery that the Fed will gauge as it decides whether to ease again.

Clearly, many gold investors are optimistic about the metal. Holdings in bullion-backed exchange-traded products rose 5 metric tons to 2,394.6 tons yesterday, about 0.6 percent below the all-time high set March 13, according to Bloomberg. Some miners and bankers are also optimistic. AngloGold CEO Mark Cutifani said today that the gold price could exceed $2,000 in 2012, driven by demand in China and India. And Austalia's Macquarie Group advised clients to buy the current dip because it expects gold prices above $2,250 this year. Macquarie lowered its forecast from $2,500. Real interest rates remain negative and any additional easing would further decrease the value of the dollar and increase long-term inflation risk, all of which are supportive of higher gold.