Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold rallied 1.4% to its highest close in two weeks as surprisingly poor factory data in the U.S. and China supported prospects for continued monetary stimulus. The ISM index fell to 49% in May, its lowest reading in four year, signaling an unexpected contraction in U.S. manufacturing. Chinese factory output also fell into contraction last month, according to HSBC, underscoring the persistent headwinds facing global recovery. Hedge funds raised their bullish bets on gold by the most in two months behind speculation that the soft data will force the Fed to continue quantitative easing at its current pace.

Tantamount to printing money, QE has helped gold to surge by 60% since 2008 because it devalues the dollar and increases the risk of long-term inflation. It has also spurred record-high rallies in equities by flooding the market with cheap cash and encouraging risk-taking by investors. The dollar tumbled on the ISM data and the Dow jumped 1%, pulling commodities higher. Silver added 2.2% while platinum and palladium gained 2.4% and 0.7%, respectively.

At th Comex close: August gold rallied $18.90 to $1,411.90; July silver added 48 cents, to $22.72; July platinum gained $35.60 to $1,497.40; and September palladium picked up $5.40, to $759.05 an ounce.