Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold fell 0.7% to close under $1,300 for the first time in six weeks as upbeat U.S. economic reports strengthened the dollar, diminishing the metal's attraction as a store of value. The Commerce Department revised GDP growth from up to 2.6% from 2.4% in the final quarter of 2013, indicating stronger momentum than previous thought Separately, jobless claims dropped to a four-month low last week as the labor market appears to be healing from a winter slowdown. The other precious metals tracked gold lower, with silver sliding 0.4% while platinum and palladium dropped 0.7% and 2.6%, respectively.

The dollar rallied on stronger data, pressuring gold and other commodities denominated in dollars for international. The buck was also supported by comments from key European Central Bankers Mario Draghi and Jens Weidmann signaling their willingness to use negative deposit rates and U.S.-style quantitative easing to combat deflation in the eurozone. Although an expansion of UCB monetary easing could pressure gold in the short term by devaluing the euro and strengthening the dollar, it is likely to become gold-positive in the longer term becuase it raises the risk of long-term inflation.

Indian gold imports are projected to rebound in the second half of 2014, supporting higher bullion prices, as the government reduces curbs on gold imports. India is the second-largest gold consumer in the world, only recently displaced from number one by China.

At the Comex close: April gold fell $8.70 to $1,294.70; May silver slid 7 cents to $19.71; April platinum dropped $9.30 $1,397.20; and June palladium shed $20.65 to $760.50 an ounce.