Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold dipped 0.4% as uncertainty over the U.S. fiscal cliff and eurozone crisis continued to undermine investor confidence. EU finance ministers remained at loggerheads over whether to release the latest $40 billion in aid to Greece. The seemingly interminable crisis is finally taking its toll on Germany, the region's largest and strongest economy, where growth slowed to 0.3% last quarter and both factory orders and industrial production tumbled in September. Global equities fell and the euro dropped to its lowest level in two months while the dollar and U.S. Treasuries gained on safe-haven buying. A rising dollar suppresses the price of gold and other dollar-denominated commodities. Silver slipped 0.1% while platinum and palladium rallied strongly, gaining 1.3% and 4.7%, respectively, on expectations of serious supply shortages next year.

At the Comex close: December gold slipped $6.10 to $1,724.80; December silver dropped 3.5 cents to $32.49; January platinum added $19.90 to $1,586.40; and December palladium jumped $28.55 to $636.60 an ounce, its highest close in three weeks.

According to a report released today by Johnson Matthey, one of the world's largest refiners of platinum and palladium, strikes at South African mines are expected to cause a 10% reduction in worldwide platinum supplies this year, compounded by an 11% decline in recycling production. Demand for platinum for automobile catalytic converters, jewelry, and investment is projected to stay constant at slightly more than 8 million ounces, putting the market into a deficit of 400,000 ounces. Palladium is expected to record its largest deficit since 2000 on mining shortfalls and rising auto demand.

Barrick Gold Corp, the world's largest gold producer, says gold discovery rates are decreasing despite record-high expenditures on exploration. Speaking at a conference in Hong Kong, Barrick CEO Jamie Sokalsky said, �It�s getting harder to find large deposits and to get those deposits into production takes at least twice as long as it might have taken a decade ago. We�re not going to see new mines coming in as fast as we thought to replace old mines that are closing.� Global mining production will increase by only 0.7% next year, according to Barclays, the slowest pace since 2008, despite rising international demand among individual investors and central banks. Central bank purchases alone are projected to account for at least 20% of all new mining production next year.