Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold dipped 0.2%, breaking a two-day winning streak of 1.6%, as good news out of Europe decreased demand for safe havens. Chancellor Angela Merkel of Germany made an official statement today in support of ECB president Mario Drahgi's proposal, outlined last week, to use central bank funds to buy the debt of faltering eurozone nations. Germany has been the primary obstacle to expanding the ECB's role in containing the debt crisis. The euro rose to a three-week high, gaining against almost every currency, and global stock markets rallied, with the S&P 500 surpassing 1,400 for the first time since May. Oil and other commodities rose on expectations that central banks, including the Fed, will increase efforts to lift global economies. Silver added 0.8% while sister metals platinum and palladium gained 0.6% and 1.5%, respectively.

At the close: December gold dipped $3.40 to $1,612.80; December silver added 22 cents to $28.09; October platinum rose $8.50 to $1,410.40; and September palladium gained $8.65 to $588.20 an ounce.

Boston Fed president Eric Rosengren today emphatically called for the Federal Reserve to launch another round of quantitative easing, or QE3, advocating an open-ended program of buying Treasurys and mortgage-backed securities until the economy is back to full strength. The first top Fed official to speak out since last Friday's jobs report, which showed unemployment rising to 8.3%, Rosengren told CNBC and the New York Times that the economy is merely "treading water" and falling well short of Fed targets for growth and inflation set at the start of the year. Inflation at its current rate of 1.8% is too low, he says, and the recent rise in the dollar is impeding the expansion of U.S. exports by making them too expensive. QE3 would help to drive down the dollar and stimulate inflation by flooding the economy with more dollars–thereby, incidentally, creating precisely the environment in which gold thrives. Gold gained by more than 85% during QE1 and QE2.