Gold News & Info

Source: American Gold Exchange

Austin— Gold rallied 1.2% and silver 3% as risk appetite returned to the market. Equities and commodities rose, with oil climbing nearly 1.5%, while the dollar index dropped 0.4% for the day and 0.6% for the week. A weaker dollar makes gold and other commodities more attractive because they are denominated in dollars internationally. On the week, gold posted a gain of 0.4% while silver lost 1%. Platinum gained 1% on the day but lost 2.8% for the week, and palladium gained 1.4% for the day but lost 6% for the week.

At the close: April gold gained $19.90 to $1,662.40; May silver added 93 cents to end $32.27; April platinum climbed $15.80 to $1,627.90; and June palladium picked up $8.85 to $659.90 an ounce.

Just a few weeks after Greece's salvation, nervous attention is turning back toward the eurozone. Yields on new Greek debt have risen to over 20% and bond prices have fallen drastically in the last few days. Last week, the IMF called for more aid to Greece to prevent possible contagion from spreading to Spain and Italy, which are vulnerable. Hedge funds and large institutional investors have begun selling off Spanish and Italian government bonds and yields are rising again because of high budget deficits and poor growth prospects. Italy and Spain are "too big to be saved" by the firewall currently in place, declared German Finance Minister Ludger Schuknect today, calling for more measures to prevent contagion.

Barclays Capital just released its Global Outlook report predicting gold to rise 15% to $1,850 in the second quarter, citing "resumption of the kind of currency debasement/inflation concerns that have been the big driver of gold and silver prices over the past 12 months." Earlier this year, gold gained 13% in a little over five weeks as central banks pulled out the monetary stops and investors sought safe havens. If the eurozone crisis really heats up again, or if the Fed decides to more easing is needed to bring down unemployment, we'd expect a similar rally in the gold price.