Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold added 0.2% to close above $1,186 as weak U.S. manufacturing data lifted demand for the metal as an alternative asset.

U.S. factory activity declined to an 11-month low and employment sentiment fell in December, according to PMI data published by Markit. In addition, the Institute for Supply Management reported the U.S. manufacturing sector grew at its slowest pace in six months, although it remained above its two-year average.

Factory reports from Europe and China were even weaker, barely registering above contraction and adding to expectations that their respective central banks will be forced to add more stimulus. ECB Chief Mario Draghi said yesterday that he will take bolder action this month to curb deflation and promote growth.

U.S. equity indexes finished virtually flat after spending most of the session in the red because of the soft manufacturing data. The Global Dow lost 0.4%. The dollar and U.S. Treasurys gained along with gold on safe-haven inflows while oil fell more than 1.1% to below $53 per barrel.

The other precious metals were mixed, with silver gaining 1.1% while platinum and palladium dropped 0.5% and 0.4%, respectively.

At the Comex close: February gold added $2.37, to $1,186.20; March silver gained 17 cents to $15.77; April platinum fell $6.05 to $1,203.90; and March palladium lost $3.19 to $794.85 an ounce.