Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold rose 0.7%, tracking the dollar higher for a second day, as investors sought refuge from continuing problems in the eurozone and slowing growth in China. Because gold is denominated in dollars internationally, it typically falls when the dollar rises. But for the last two sessions both have benefited from safe-haven inflows, with the dollar reaching its highest level since 2010. Adding support for gold was the announcement that Comex, the world's largest commodities exchange, will cut margins for trading the metal by 10%, effective next week. Despite two days of gains gold was off 1.4% for the week. Silver rose 0.8% but posted a weekly loss of 1.1%. Sister metals platinum and palladium notched daily losses of 0.3% and 0.4%, and weekly losses of 2.2% and 2.3%, respectively.

At the close: June gold gained $11.40 to $1,568.90; July silver rose 23 cents to $28.39; July platinum added $4.10 to $1,426.50; and June palladium picked up $2.50 to $590 an ounce.

Greece is on everyone's mind but China's sharp slowdown could have equally damaging consequences for global growth. In the first quarter of 2012, China's economy expanded at 8.1%, year-over-year, which was short of official projections. But almost all of that growth took place in 2011, with very little growth so far this year, according to the New York Times. A crumbling real estate market, flagging exports, mounting job losses, and reduced consumer spending are taking their toll, and are expected to lead to more monetary easing to stimulate growth. Legendary Swiss investor Marc Faber told CNBC today that a global recession is a "100% certainty" next year, largely because of a slowdown in China. Gold and cash are the only investments to hold in this scenario, he said.