Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.5%, recouping yesterday's loses to close at $1,295 after India lifted import restrictions that have been curtailing demand in the world's second-largest gold buying nation. The metal was also supported by much stronger China manufacturing data, which is likely to boost demand for commodities and natural resources, and higher-than-expected U.S. jobless claims, which added to safe-haven buying.

Following the decisive victory by Narendra Modi in national elections, the reserve Bank of India relaxed some of its onerous limits on gold imports. Heading into the Indian wedding season, traditionally a period of peak gold consumption, imports are projected to rise by 10 to 15 tons per month because of the policy change.

According a World Gold Council report released this week, global gold demand totals were significantly impacted in Q1 by the stifling import duties, which cut Indian gold purchases by more than 50%. Free of restrictions, Indian demand is projected to accelerate in the second half of the year to reach 1,000 tons this year, which would help to support high global gold prices.

The other precious metals followed gold higher despite the dollar index rising to a seven-week high on upbeat U.S. manufacturing data. A stronger buck typically weighs on commodities denominated in dollars by making them more expensive in international trade. Silver climbed 0.9% while platinum and palladium added 1.2% and 0.7%, respectively.

At the Comex close: June gold gained $6.90 to $1,295; July silver climbed 18 cents to $19.52; July delivery platinum added $18.20 to $1,493.10; and June palladium picked up $6, to $836.45 an ounce.