Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold rallied for a sixth session, gaining 0.5% for the day and 2.3% for the week, on a combination of safe-haven demand and expectations of monetary easing from the Federal Reserve. Anxiety over this weekend's elections in Greece and France continue to drive investors into gold as protection from eurozone turmoil. And another round of soft U.S. economic reports increased speculation that the Fed will be moved to new policy interventions to stimulate and protect the flagging recovery, possibly as soon as its meeting next week.

The Dow rallied another 115 points while the dollar dropped for a weekly loss of 1.1%, its biggest since February, also on expectations of more Fed action. Easing depresses the value of the dollar, and it increases the price of risk assets by increasing the amount of inexpensive liquidity in the market. Gold benefits because it is denominated in dollars, and because easing raises the risk of long-term inflation, increasing demand for gold as a hedge. Silver rallied by 1.2% for a weekly gain on 0.9%. Platinum edged down but gained 4.4% for the week while palladium dropped 0.7% for the day but gained 3% for the week.

At the close: August gold rose $8.50 to t $1,628.10; July silver delivery picked up 33 cents to $28.74; July platinum fell 40 cents to $1,487.20; and September palladium dropped $4.50 to $630.40 an ounce.

Adding to the week's slew of negative U.S. economic data, consumer sentiment dropped to its lowest level since December because of weak hiring and income growth. Industrial output slipped in May. And the Empire State index fell by more than expected to its lowest level since November, indicating a slowdown in New York region manufacturing. After yesterday's widening current-accounts report and rising jobless claims, and faltering payrolls and manufacturing reports from earlier in the month, that's a lot of slowdown to swallow. Uncertainty reigns in the U.S. economy, and all eyes will look to the Fed next week.