Gold News & Info

Source: American Gold Exchange

Austin— Gold and silver gained for the third straight day as positive U.S. jobs news and buoyancy from yesterday's Greek debt deal continue to stoke risk appetite, driving equities and commodities higher. Payrolls increased by more than 200,000 for the third consecutive month, capping the best six months of job growth since 2006. Job gains are expected to translate into increased consumer spending, which accounts for more than 70% of the U.S. economy. Gold rose 0.8% for the day and posted a 0.1% gain on the week. Silver added 1.1% today but lost 1% for the week. Platinum and palladium gained 1.7% and 1.5% for the day, respectively, but each lost 0.4% on the week.

At the close: April gold added $12.80 to $1,711.50; May silver picked up 38 cents to $34.21; April platinum gained $28.20 to $1,684.90; June palladium rose $10.50 to $709.95 an ounce.

The markets are pleased that Greece will qualify for its 130 billion euro bailout but fears are already growing that it won�t be enough and another bailout will be needed. Greece has been in recession for five years. Unemployment is over 20%, with more than 46% youth unemployment, and the government must further slash public payrolls as part of this bailout agreement. That leaves little real hope that Greece can grow its way back into solvency. The IMF projects eurozone economies as a whole to shrink by 0.5% this year. As a result, according to JP Morgan's chief investment officer, Michael Cembalest, the ECB is going to have to continue printing money, to keep not just Greece afloat but the entire eurozone. Easing is now expected in China, too, because of lower-than-expected industrial output, retail sales, and inflation. And as we reported on Wednesday, the Fed is looking for ways to enact another round of easing. Easy money will be the way of the world for quite some time, which will support higher gold prices.

Gold demand is building again after last week's correction. Hedge funds increased their bets on higher gold prices by 10%, to the most since September 6, according to Bloomberg, and investments in bullion-backed ETPs rose for the seventh straight week to a record-high $131 billion. In a Bloomberg survey published today, 70% of traders interviewed expect gold to rise again next week.