Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold dipped for the second day, closing at $1,208.50 in choppy trade as the dollar strengthened and equities extended their rallies in expectation of additional stimulus in the Eurozone. The metal remains up 2% so far this year after dropping 1.4% in 2014.

Gold initially rose as high as $1,217 early in the session as traders digested yesterday's Fed minutes, perceiving the central bank as willing to exercise patience before raising interest rates later this year. Higher rates boost the dollar, pressuring gold and other commodities denominated in it for international trade by making them more expensive to users of other currencies.

Prices eroded later in the day as the dollar rose on soft European economic data. Factory orders in Germany, Europe's largest and strongest economy, fell sharply in December, reversing a minor growth trend, while Eurozone consumer sentiment remained mired in pessimism for a second month.

Coming one day after reports of falling consumer prices, the data bolstered speculation that the ECB will undertake quantitative easing when it meets later this month.

The euro promptly fell to a nine-year low against the dollar.

Expectations of additional easing in Europe and patience by the Fed stoked risk appetite, pushing the Dow and S&P 500 higher by 1.8% while the Global Dow jumped 2%. U.S. Treasury bonds dipped with gold on reduced demand for safe havens.

The other precious metals were mixed. Silver lost 1% while platinum and palladium picked up 0.1%.

At the Comex close: February gold dipped $2.20 to $1,208.50; March silver lost 16 cents to $16.39; April platinum added $2.10 to $1,223; and March palladium picked up 65 cents to $793.10 an ounce.