Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold dipped 0.2% in choppy trade, closing above $1,183 after reaching $1,191 earlier in the session, as a rising dollar offset safe-haven inflows on deepening problems with Greece's solvency. The metal finished the first quarter virtually flat after falling 2.5% this month.

The dollar rose against a basket of rivals, including a 1% gain against the euro after Greece failed to provide a program of economic reforms to its creditors, the EU and IMF. Greece had until yesterday to submit detailed plans to qualify for more aid. Greece now risks losing its next tranche of bailout funding, risking default and possible exit from the Eurozone.

The currency was also supported by mostly positive data, which led traders to think the Fed may be more inclined to raise interest rates by June. Consumer confidence rebounded strongly in March behind rising optimism about the job market. Home prices gained 4.6% in January, according to the S&P/Case Shiller index, suggesting better health in the crucial housing sector.

The dollar has gained nearly 9% this year for its best quarter since 2008, largely because of speculation that the Fed will tighten monetary policy while Europe, China, Japan, and most other nations loosen theirs. A rising dollar typically pressures gold and other commodities denominated in it for international trade by making them more expensive to users of other currencies.

Goldman Sachs reported today that the world may run out of minable gold in 20 years. The very low concentrations of the metal within the Earth's crust and diminishing high-quality deposits available may be exhausted within two decade. The resultant "peak gold" scenario should support higher gold prices.

In a separate report, consultancy Metals Focus said today that gold's current bear cycle will end this year, making way for a new bull cycle in 2016. Rising demand in Asia, reduced selling in the West, and falling mine production should boost prices. In addition, Fed's gradual increases in rates will support gold by keeping real rates negative�that is, lower than inflation�for much longer than previously thought.

The other precious metals were mixed. Silver slid 0.5% today but gained 0.3% this month and 6% this quarter. Platinum gained 2.3% today but lost 3.5% in March, while palladium rose nearly 1% today but plunged 10% this month.

At the Comex close: June gold dipped $2.10 to $1,183.20; May silver slid more than 7 cents to $16.59; July platinum gained $26 to $1,143.40; and June palladium rose $6.30 to $735.30 an ounce.