Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold rebounded 0.7% as economic optimism and prospects for more monetary easing boosted demand for the metal as an inflation hedge among investors and central banks. U.S. consumer optimism rose to a six-month high behind lower gasoline prices, rising home values, and an improving labor market, according to a Bloomberg survey. British GDP surged 1% for its fastest growth in five years as the U.K. officially exited its first double-dip recession since 1975. And the Bank of Japan plans to increase quantitative easing by another $125 billion next week. Along with yesterday's renewed commitment to QE3 by the Fed, these developments were read by the markets as raising the risk of long-term inflation, making gold more attractive as a hedge. The other precious metals gained along with gold, with silver adding 1.5%, platinum 0.4%, and palladium 2%.

At the Comex close: December gold rallied $11.40 to $1,713.00; December silver added 46 cents to $32.08; January platinum picked up $6.10 to $1,568.80 ; and December palladium rose $11.75 to $604.50 an ounce.

Like individual investors, central banks continue to buy gold in order to offset currency and inflation risk. Brazil bought gold for the first time since 2008, increasing its reserves by 1.7 tons last month to more than 35 tons, according to the IMF. Turkey bought another 6.8 tons and the Ukraine also added gold to its reserves. The World Gold Council says central banks will buy nearly 500 tons this year, an all-time record, and the trend of strong sovereign purchases should continue to support higher gold prices.