Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.7% as falling consumer confidence and rising wholesale inflation spurred demand for the metal as an alternative store of value. After hitting a six-year high in May, consumer sentiment dropped unexpectedly this month as uncertainty grew about the pace of recovery. Producer prices rose for the first time since February, adding to appetite for gold as an inflation hedge. The data was seen as more evidence that the Fed will not taper monetary easing when it meets next week. U.S. equities fell, marking the third losing week out of four, and the dollar weakened against most major rivals, supporting higher gold.

Speculation that the Fed might soon withdraw stimulus has weighed on gold in recent months, but that sentiment appears to be changing. In a report issued today, the IMF expects QE to continue at current levels at least through 2013, and urged the Fed to manage any withdrawal from stimulus very carefully so as not to destabilize international markets. The IMF also warned that risks to the U.S. recovery remain "tilted toward the downside."

Gold finished the week 0.3% higher for its third winning week out of the past four. Silver added 1.5% today to finish the week 1% higher. Platinum finished the day virtually flat and the week with 3.7% decline. Palladium inched up 0.1% to close the week with a 3.9% loss. Both PMGs were hurt by news that miners will postpone striking in South Africa.

At the Comex close:August gold rallied by $9.80 to $1,387.60: July silver gained 32 cents to $21.95; July platinum edged up 30 cents to $1,447.40; and September palladium added 65 cents, to $731.70 an ounce.