Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— After rallying to a 12-week high of $1,245 early in the session on safe-haven demand, gold retraced its gains to finish virtually flat at $1,234.50, holding up well in a pervasive sell-off of equities and commodities after soft economic data in the U.S. and a lower forecast for global growth snuffed out risk appetite.

U.S. retail sales came in much weaker than expected in December, dropping by nearly 1% for the worst monthly performance in a year. In addition, the Fed's Beige Book reported ">concerns about weaker consumer spending and the effect of tumbling oil prices on the stock market. And the BLS said import and export prices extended their recent declines by dropping 2.5% and 1.2% in December, respectively.

The soft data pulled the dollar down as traders speculated that stumbling retail sales and falling prices will reduce pressure on the Fed to raise interest rates. It also sent stocks into a tailspin, knocking the Dow more than 1% lower. The negative sentiment was compounded after the World Bank cut its global growth forecast for 2015 and 2016, citing deflationary forces in Japan and Europe, and rising debt issues in emerging markets.

Impressively, gold resisted the general sell-off in the commodities markets, trading more like a currency of last resort. The Bloomberg Commodities Index fell to its lowest level since mid-2002, led by copper's biggest loss in six years because of slowing demand for the industrial metal in China. Silver dropped 1% while platinum and palladium lost 0.7% and a whopping 4.3%, respectively.

At the Comex close: February gold dipped 10 to $1,234.50; March silver dropped 17 cents to $16.99; April platinum fell $8.80 to $1,239; and March palladium plunged $35.05 to $780.65 an ounce.