Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold slipped 0.4% as reduced jobless claims helped to spur a rally in the dollar. New claims for U.S. unemployment benefits dropped by 4,000 to 323,000 last week, the lowest level since early 2008. The surprising improvement fueled hopes that the labor market may be healing despite large federal spending cuts, potentially reducing pressure on the Fed to expand quantitative easing and further undermine the dollar. The dollar rallied nearly 1% on the news, pressuring the gold price because gold is denominated in dollars internationally. Silver slipped 0.1% while platinum and palladium rallied 0.8% and 2.4%, respectively.

At the Comex close: June gold slipped $5.10 to $1,468.60; July silver lost 2 cents to $23.91; July platinum added $11.60; and June palladium picked up $16.50 to $714.75 an ounce.

The dollar was also supported by deeper global easing. South Korea announced a rate cut today, following similar cuts by China, Australia, India, the ECB, and the BOJ in recent weeks. Morgan Stanley and Credit Suisse expect yet more stimulus to be deployed when the Group of Seven finance ministers meet tomorrow in the U.K. Additional global easing may pressure gold in the short term because it buoys the dollar. In the longer term, however, it increases the risk of long-term inflation and spurs demand for gold as an alternative store of value.