Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.3% to close at $1,264.50 as new monetary easing by China and the ECB's cool reception to Greece's debt plan increased safe-haven demand

The People's Bank of China joined the global easing trend, pumping additional liquidity into its ailing economy by slashing the amount of cash reserves required by banks to anchor loans. Faced with a slowing growth and falling business investment, China is adding stimulus to expand its money supply and increase lending. Monetary easing undermines the value of currencies and builds demand for gold as an alternative store of value.

The ECB responded coolly to Greece's proposal swap its foreign debt for growth-linked bonds, calling it a merely a write-down in another form. At the same time, Germany rejected reductions in austerity policies required by the ECB bailout agreement. The reaction caused renewed concerns that Greece's new Leftist government may renege on its obligations, potentially pushing the country into default and out of the Eurozone.

ADP reported that employment in private sector slowed in January, with 213,000 jobs added after 253,000 in December. Separately, the Institute for Supply Management reported that the services sectors grew slightly faster last month but reduced the number of new hires. The markets took little notice of the data, awaiting Friday's non-farm payrolls report as the better measure of U.S. labor strength.

Retracing yesterday's surge, oil fell 8% to close back under $49. The other precious metals tracked higher with gold, with silver rising 0.45 while platinum and palladium picked up 0.3% and 0.5%, respectively.

At the Comex close: April gold gained $4.20 to $1,264.50; March silver rose 7 cents to $17.39; April platinum added $3.70, to $1,238.90; and March palladium picked up $4.20, to $790.20 an ounce.