Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold fell 1.2% to close under $1,232, surrendering more than half of yesterday's gains as upbeat U.S. economic data decreased safe-haven demand. Jobless claims fell unexpectedly last week to a two-month low, suggesting improvements in the labor market that may lead to a strong non-farms payroll report, due out tomorrow. Third-quarter GDP growth was revised upward from 2.8% to 3.6%. The higher growth figure resulted in part from unsold inventories rising at the fastest pace in fifteen years, suggesting a much weaker fourth quarter to follow. Still, traders saw the positive data as more evidence that the Fed may taper quantitative easing sooner than expected, diminishing gold's allure as an alternative store of value.

Rising bets on a December taper pushed equities to a fifth straight session of declines, with the Dow and S&P 500 dropping more than 0.4% while the Global Dow lost 0.3%. Tantamount to printing money, QE has spurred higher prices for precious metals and equities by flooding the economy with liquidity, devaluing the dollar and increasing the risk of long-term inflation. The other precious metals were mixed, with silver sliding 1.3% after yesterday's 4% rally. Platinum fell 0.9% while sister metal palladium bucked the trend with a 1% gain.

At the Comex close: February gold fell $15.30 to $1,231.90; March silver dropped 26 cents to $19.57; January platinum slid $12.50 to $1,363; and March gained $7.60 to $736.85 an ounce.