Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.4% to close at $1,177.50 as the dollar eased ahead of this week's meeting of the European Central Bank.

The dollar slid 0.3% against the euro following the release of upbeat banking data in Eurozone and comments from ECB officials indicating that additional quantitative easing may not be needed. Quarterly lending reports showed banks loosening credit, adding to liquidity and lessening the need for additional easing.

Expectations of deeper QE, which is like printing money, has weighed on the euro recently. If the ECB decides against adjusting the program at this week's meeting it will support the euro and weigh, in turn, on the dollar. A weaker dollar supports gold and other commodities by making them less expensive overseas.

Investor demand for gold has risen in recent weeks as the prospects for an interest rate increase for the Fed this year have receded in the face of softer U.S. data and the slowdown in China. SPDR Gold Shares ETF, the biggest gold-back ETF in the world, had holdings increase 3.6 tonnes yesterday.

The other precious metals also finished higher, with silver and platinum rising 0.5% while palladium jumped 1%.

At the Comex close: December gold gained $4.70 to $1,177.50; December silver added more than 7 cents to $15.92; January platinum rose $5.50 to $1,020.10; and December palladium jumped $6.75 to $694.85 an ounce.