Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinExtending yesterday's rise, gold gained 0.3% to close just under $1,283 as the dollar tumbled and equities weakened, boosting demand for alternative stores of value.

The dollar fell 0.7% to a three-week low, dropping more than 1% against the euro after Germany's GPD grew by more than expected. The Eurozone's largest economy expanded by an annualized 3.3% amid signs that the rest of the region is also on the upswing. It was the buck's forth decline in five sessions. A weaker dollar typically supports gold and other commodities prices in it for international trade by making them less expensive overseas.

Equities also retreated, with the Dow and Global Dow dropping 0.2%, as investors worldwide weighed the uncertainty in Washington over the course of possible tax cuts. Conflicting plans put forward by the House and Senate have dimmed the prospects for quick passage of tax reform legislation.

Gold also received support from rising wholesale inflation after the Producer Price Index surged 0.4% in October, far more than forecast. Hedge funds and large money managers are betting on higher gold prices, with net-long positions rising on Comex last week for the first time in two months.

The other precious metals were mixed, with silver adding 0.2% while platinum and palladium slid 0.9% and 0.4%, respectively.

At the Comex close: December gold gained $4 to $1,282.90; December silver added 3 cents, to $17.07; January platinum lost $8.30 to $927.30; December palladium slid $4.15 to $985.55 an ounce.