Gold News & Info

Source: American Gold Exchange

Austin— Gold closed mildly lower in New York today, after rising slightly in London and Asia, as unexpectedly strong U.S. employment and manufacturing data shifted investors into equities. Flat U.S. consumer inflation, and better-than-expected bond sales in Spain and France may also have prompted some profit-taking from gold, which had risen in five of the previous seven sessions and gained more than 6% since the first of the year.

At the Comex close: February gold fell $5.40 to $1,654.50; March silver lost 3 cents to $30.51; April platinum slid $7.30 to $1,518; and March palladium rose $9.90 to $678.40 an ounce.

Positive economic signals are spurring a slight shift from safe-haven dollars and gold into higher risk assets. The Philadelphia Fed reported that their regional economic index increased to a 3-month high in December, which is encouraging. And weekly jobless claims dropped by 50,000 to their lowest level since April 2008, according to the Labor Dept. While these are welcome steps, Marketwatch reports that many analysts say needed improvements in employment and housing will not happen quickly enough to prevent a third round of easing from the Fed. Indeed, Miller Tabak's chief economic strategist Andrew Wilkinson believes the announcement of QE3 could come as early as next week. Any additional easing will strongly support a higher gold price.

Meanwhile, the dollar fell against the euro as today's bond sales in Spain and France were surprisingly strong despite last week's credit downgrades. The softer dollar helped to limit gold's losses. Damping eurozone optimism, however, was news that hedge funds are threatening to sue Greece over forced losses on bonds, an adversarial position that can only damage Greece's prospects for solvency and the eurozone's for recovery. As we discussed earlier this week, both Fitch and S&P believe Greek default is inevitable, perhaps by March. The result could be a Lehman-like crisis in the global financial system.