Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold dipped slightly to close at $1,319 but finished the week with a gain of 1.1%, fueled by growing risk-aversion and a falling dollar. The Dow and S&P 500 dropped nearly 1%, with the latter closing at a two-month low as it extended its biggest two-day slide since June. Gold found safe-haven demand rising among investors who think equity markets are ripe for a deeper correction.

Geopolitical tensions also boosted gold this week as Russia fomented unrest in eastern Ukraine, adding to worries that it might attempt to annex more territory. The U.S. announced additional sanctions against Crimean officials and threatened new measures against Russia. Treasurys rallied alongside gold on increasing safe-haven demand, pushing yields on 30-year bonds to a nine-month low.

The dollar fell more than 1% this week against the yen and euro following the release of dovish Fed minutes showing the central bank to be more reticent about raising interest rates than previous believed. Data indicating an unexpected 0.5% jump in wholesale inflation last month buoyed the buck slightly today by potentially supporting the case for monetary tightening. A falling dollar supports higher prices for gold and other commodities denominated in dollars because they become less expensive to holder of other currencies.

The other precious metals were mixed today and mostly higher this week. Silver slid 0.7% to finish the week virtually unchanged, while platinum added 0.2% on the day and 0.8% on the week. Palladium was the big winner, picking up 1.8% today and 2% this week, driven by increase supply concerns because of new sanctions threatened against Russia, the world's leading producer.

At the Comex close: June gold dipped $1.50 to $1,319; May silver slid 14 cents to $19.95; July platinum added $2.50, to $1,462.60; and June palladium jumped $14.50 to $806.80 an ounce.