Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold rallied 1.8% as bargain-hunters swooped in after last week's sell-off. Better-than-expected jobs data caused the metal to drop by 3% on Friday while the dollar spiked to a three-year high on speculation that the Fed may taper monetary stimulus as early as September. Reduced easing would support higher interest rates and a stronger dollar, making gold less attractive as an alternative store of value. Today, traders saw Friday's action as overdone, shifting back into gold at lower prices and bidding down the dollar. Strategists at Deutsche Bank wrote that gold's recent correction is probably over.

Gold was also supported by safe-haven demand as investor confidence in the eurozone fell on deepening sovereign debt gloom, according to Sentix research institute. Political instability in Portugal drove the yield on government bonds over 8% last week as lenders grow increasingly uneasy about the debt-riddled nation's ability to fulfill its budgetary bailout obligations. Greece is also teetering back toward insolvency, although eurozone finance chiefs decided today to prevent a debt-crisis showdown by releasing just enough aid to keep it afloat until after Germany's elections in September.

The other metals also rebounded, with silver adding 1.6%. Platinum and palladium jumped 2.7% and 2.6%, respectively, after a wildcat strike at two Anglo American Platinum mines in South Africa threatened global supply of the sister metals.

At the Comex close: August gold rallied $22.20 to $1,234.90; September silver picked up 30 cents to $19.04; October platinum jumped $35.60 to $1,362; and September palladium gained $17.85 to $695.40 an ounce.