Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold edged up 0.1% in thin trade on the prospect of more monetary easing from central banks. With Japan's new Prime Minister, Shinzo Abe, calling for aggressive increases in monetary stimulus to boost that country's flagging economy, the Bank of Japan is expected to expand its QE-styled program of asset purchases by as much as 10 trillion yen at its policy meeting on Thursday. Along with last week's announcement of QE4 by the Fed, it's an opening salvo in what Bank of England Governor Mervyn King last week called the forex wars of 2013, in which major economies will compete to depress their currencies next year. These measures are bullish for gold because they raise the risk of long-term inflation and stimulate demand for gold as an alternative store of value. The other precious metals slipped lower, with silver losing 0.1%, platinum 0.4%, and palladium 0.5%

At the Comex close: February gold gained $1.20 to $1,698.20; March silver slipped 2 cents to $32.28; January platinum dropped $6 to $1,608.50; and March palladium fell $3.75 to $698.30 an ounce

Gold also received early safe-haven support from reports that manufacturing fell in the New York region for the fifth straight month, prompting traders to position for increased stimulus. But its gains were neutralized by news of progress in the U.S. fiscal cliff negotiations after John Boehner tentatively agreed to tax increases on incomes over $1 million. The prospect of a deal increased risk appetite, driving the S&P 500 higher by nearly 1.2% and pulling safe-haven money away from gold.