Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold gained another 1.1% on safe-haven inflows and growing expectations that the Fed will further ease monetary policy to stimulate growth and protect the U.S. recovery from eurozone fallout. Fitch downgraded 18 more Spanish banks and the Spain's borrowing cost jumped to a new euro-era high as investors are losing confidence that the eurozone debt crisis can be contained. The Dow posted a triple-digit gain, also driven by stimulus hopes, and oil rallied. Silver added 1.2% and platinum gained 0.4% while palladium slipped by 0.1%

At the close: August gold rose $17 to $1,613.80; July silver picked up 33 cents to $28.95; July platinum added $5.10 to $1,454.40; and September palladium fell 90 cents to $624.25 an ounce.

Despite Saturday's 100 billion euro bailout of Spain, fears are growing that debt contagion is spreading to Italy. Italian borrowing costs are climbing rapidly, and with government debt at 120% of GDP, unemployment above 10% and rising, and an economy projected to contract by 1.5% this year, Italy is next in line for an expensive bailout. Where will the money come from? Marketwatch reports that there's a growing belief in Europe that the ECB will intervene in a big way and start printing money.

Similar speculation about the Fed is quickly building momentum. Fed officials have been increasingly public in their concerns that Europe's crisis will spill over and harm the U.S. recovery. Dennis Lockhart of the Atlanta Fed and John Williams of the San Francisco Fed spoke on the subject yesterday. And Chicago Fed President Charles Evans told Bloomberg TV today that with unemployment growing, the recovery slowing, and the eurozone crisis deepening, he's in favor another round of asset purchases like QE1 and QE2.