Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold gained more than 1%, rising for the fourth straight day as investors continue their flights to safety. Rising bond yields in Spain and Italy are reigniting fears of the eurozone sovereign debt crisis while snowballing sub-par U.S. data is raising concerns about the recovery. The Dow dropped more than 200 points for its fifth straight losing session and Treasury bonds gained while the Vix index of market volatility, the so-called "fear index," rose over 8%, indicating the return of substantial anxiety to the market. Silver gained 0.5% while platinum and palladium, more closely tied to industrial applications and equity markets than gold, fell 1.5% and 1.1%, respectively.

At the close: June gold rose $16.80 to $1,660.70; May silver added 15 cents to $31.68; July platinum fell $24.50 to $1,593.70; and June palladium lost $6.95 to $636.85 an ounce.

For much of the year, gold has been trading as a commodity, rising alongside equities and other risk assets as the global economic picture seemed to improve. Now, its more typical role as safe haven asset is reasserting itself. Last Friday's non-farm payrolls report was a wake-up call, showing job-growth falling by 50% from each of the previous two months. But alarming data has been trickling in for a while. Housing markets remain soft. The March ISM-Chicago business barometer fell more than expected, and manufacturing surveys from four key Fed regions showed upward price-pressure and slowing in important areas.

What's more, the Citigroup Economic Surprise Index, which tracks positive surprises versus negative surprises in U.S. economic data, has been dropping steadily since early February. A positive reading on the index suggests that economic releases have been, on balance, beating consensus expectations; negative means the data is coming in worse. The index is about to turn negative for the first time since mid-October. Taken together, these trends are beginning drive investors back into gold as a safe haven. They also increase the possibility of new policy interventions by the Fed, which would likely drive gold to a new all-time high.