Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold rebounded by 0.5% despite a rising dollar as bargain hunters returned to the market. Gold dropped more than 6% yesterday after Fed Chair Ben Bernanke laid out a possible schedule for ending quantitative easing by mid-2014�if the economy improves. The statement caused a global route of stocks, bonds, and commodities as panicked traders shifted into cash. It also caused St. Louis Fed President James Bullard to rebuke Bernanke today, calling the announcement premature and possibly undermining of Fed credibility. QE has helped to rally equities by flooding the markets with liquidity and encouraging risk-taking by investors. It also supports higher gold prices by devaluing the dollar and raising the risk of long-term inflation.

U.S. equities crept higher and the dollar extended its rally to three days, bolstered by the prospect of reduced easing. The fact that gold rose alongside a rising dollar was positive for the metal, showing indicating that yesterday's precipitous drop was probably overdone. Nonetheless, gold finished the week with a loss of more than $95. The other metals also closed higher today, with silver adding 0.7%, platinum 0.4%, and palladium 1.5%.

At the Comex close: August gold rose by $5.80 to $1,292.10; July silver picked up 14 cents to $19.96; July platinum added $5.70, to $1,369.50; and September palladium gained $9.65 to $674.75 an ounce.