Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold slipped 0.5%, closing just under $1,200, as traders took profits after seven winning sessions. The metal still finished the week 1.3% higher for its second straight weekly gain.

Over the past two weeks, gold has risen by a net 4.2%, largely because of declines in the dollar driven by speculation that the Federal Reserve will keep interest rates near zero for longer than previous thought. A falling dollar supports higher gold prices by making the metal, which is denominated in dollars for overseas trade, less expensive to users of other currencies.

In last week's dovish policy statement following its March meeting, the Fed emphasized its need to be "reasonably confident" that inflation will move back toward its 2% target before the first rate hike. The current trend is in the opposite direction, with the Fed's inflation forecast falling to 1.4% from 1.8% in the December statement.

Turmoil in Europe and the Middle East have has also underpinned higher gold prices. Yesterday's Saudi airstrikes against rebels in Yemen stoked concerns about possible interruptions to global oil supplies, increasing safe-haven demand. And Greece's inability to present the program of economic reforms required by the ECB before release of additional aid raises once again the specter of Greek default and possible exit from the Eurozone.

The other precious metals were down for the day and mixed for the week. Silver dropped 0.4% but gained 1.1% this week. Platinum fell 0.9% today but finished 0.2% higher this week. Palladium plunged 4.2% today and 4.9% this week.

At the Comex close: April gold slipped $5 to $1,199.80; May silver dropped 7 cents to $17.07; April platinum lost $10.40 to $1,143.60; and June palladium declined $32.35 to $741 an ounce.