Gold News & Info

Source: Bill Musgrave, American Gold Exchange

Austin— Gold surged 1.5% to close at $1,204 as tumbling global equities and rising fears of a Greek exit from the euro drove investors to seek safe havens.

U.S. equities had their worst day in three months, with the Dow dropping 330 points, or 1.9%, while the S&P 500 lost 1.8%, after collapsing oil prices and a plummeting euro snuffed out risk appetite. The Global Dow fell even harder, losing nearly 2.1%.

Crude oil fell more than 5% to below $50 per barrel, the lowest since 2009, after reports that Russian and Iraqi production remain at the highest levels in more than 25 years despite waning demand caused by slower global growth and excess supply. Oil prices have plunged more than 55% since June.

The euro dropped to a nine-month low as traders price-in the growing likelihood that the ECB will announce Fed-style quantitative easing in January to combat deflation. Tantamount to printing money, QE will further cheapen the euro. Gold prices in euros have climbed to the highest levels in more than 15 months as investors seek protection against currency debasement and the associated risk of higher long-term inflation.

Growing concerns about a so-called Grexit, or Greek exit from the euro, contributed to today's global risk-aversion, boosting safe-haven bids for gold and U.S. Treasury bonds.

Parliamentary elections in three weeks may result in a new Greek government led by the left-wing Syriza party, which is leading in polls primarily because it has promised to end the unpopular austerity measures required by the terms of the ECB bailout. Failure to uphold the ECB strictures may push Greece back toward insolvency and force it out of the shared currency, risking debt-contagion in the rest of the Eurozone.

Demand for physical bullion in China, the world's largest gold consumer, continues to climb. Premiums rose to $7 over benchmark prices per ounce, according to Bloomberg, up from $5 last week, which was already high. January and February are typically months of high gold demand in China because of the Lunar New Year holiday, when the metal is widely given as gifts.

The other precious metals were mostly higher, with silver leading the way by gaining 2.8%. Platinum rose 0.6% while outlier palladium, more directly tied to industry, dipped 0.2%.

At the Comex close: February gold jumped $17.79 to $1,204; March silver futures surged 44 cents to $16.21; April platinum rose$7.22 to $1,210.90; and March palladium dipped $1.59 to $793.20 an ounce.