Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold slid 0.5% as a stronger dollar reduced demand for the metal as an alternative store of value. Meeting in Frankfurt, the ECB held interest rates steady but actively entertained the use of quantitative easing, the Fed-style program of buying long-term government debt as a way to flood the economy with cheap liquidity. ECB President Mario Draghi admitted that QE may be required to combat falling inflation in the region.

The dollar rallied against the euro and other major rivals in response to this tentative shift in policy. Because gold is denominated in dollars for international trade, a stronger dollar pressures demand by making it more expensive to holders of other currencies. In the longer term, deeper monetary easing in the eurozone is likely to be gold-positive, however, as it devalues the euro and pushes European investors toward inflation hedges.

Gold initially rose to an intraday high of $1,290 on some softer U.S. economic data. Jobless claims rose to the highest level in month and the U.S. trade gap widened more than expected in February. But later in the session, ISM data indicating accelerating growth in the U.S. services sector undermined its safe-haven appeal.

The other precious metals were mixed. Silver fell harder than gold, dropping 1.2%, while platinum and palladium, still buoyed by supply concerns because of mining strikes in South Africa, added 0.5% and 0.1%, respectively.

At the Comex close: June gold slid $6.20 to $1,284.60; May silver fell 24 cents to $19.80; July platinum picked up $6.80, to $1,445.50; and June palladium edged up $1.50, to $788.85 an ounce.