Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.2% to close above $1,087 as tumbling U.S. equities and a softer dollar stoked demand for safe-haven assets.

The S&P 500 lost more than 2%, falling below 1,900 for the first time in three months, after data revealing a huge build-up in inventories of gasoline, diesel, and heating oil hammered energy stocks and reversed earlier gains. The index is now down 11% from its high last May. U.S. Treasury bonds rallied along with gold as investors sought safety.

The dollar rolled back against major rivals after the Fed's Beige Book report showed U.S. growth is being hampered by tumbling energy prices and the strong dollar, which weigh on manufacturing. A weaker dollar supports gold and other commodities by making them less expensive to foreign buyers.

The buck was further pressured by comments from two Fed officials suggesting that China's slowdown may put a brake on the pace of future U.S. rate hikes. Boston's Eric Rosengren said the recent rout in Chinese stocks and weaker energy prices signal that "global growth has slowed significantly." Separately, Chicago's Charles Evans echoed those sentiments and added that inflation expectations are slipping.

The other precious metals were also higher for the session, with silver rallying 3% while platinum and palladium picked up 1.5% and 3.6%, respectively.

At the Comex close: February gold rose $1.90 to $1,087.10; March silver jumped 40 cents picked up 40 to $14.16; April platinum gained $12.70 to $851.30; and March palladium rebounded by $16.85 to $486.65 an ounce.