Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold fell 1.6% and briefly traded under $1,600 for the first time since August as positive U.S. economic data reduced its safe-haven appeal. Consumer confidence rose in February to a three-month high behind rising property values, climbing equity markets, and a slightly stronger job market. And manufacturing rose unexpectedly in the New York Fed region, fueling optimism that factories are on the rebound. The data rallied the dollar, which pressured all four precarious metals.

Gold's losses accelerated on technical selling after reports that billionaire investor George Soros reduced his stake in SPDR Gold Trust, the world's largest gold-backed ETF, by 55% last quarter. Once support was broken at $1,625, stop-loss sales were automatically triggered, driving the price through support at $1,600 before it rebounded from an intraday low of $1,597 to just under $1,610. Soros was the second-largest investor in the gold ETF. The largest, John Paulson, kept his stake intact at 21.8 million shares, according to an SEC filing. Gold lost 3% on the week. Silver fell 1.7% today for a weekly loss of 5.1%. Platinum dropped 1.9% on the day and 2.2% on the week, while sister metal palladium lost 1.4% today but edged up 0.2% for the week.

At the Comex close: April gold fell $26 to $1,609.50; March for silver lost 50 cents to $29.85; April platinum dropped $33.20 to $1,677.70; and March palladium gave up $10.90 to $753.15 an ounce.

While giving lip-service to avoiding a currency war at their meeting in Moscow this week, the G-20 nations are refusing to take measures to prevent competitive currency devaluations, leading many to believe a currency war is inevitable as nations slash exchange rates in order to make exports more attractive and imports more expensive. As Marketwatch reports today, systematic devaluations of global currencies are quite bullish for gold, which thrives as an alternative store of value during periods of rising inflation-risk and loss of faith in paper currencies.