Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold edged up another 0.2%, posting its third straight day of gains, on growing confidence that the eurozone will take aggressive steps to solve its protracted sovereign debt crisis. Germany's Angela Merkel and France's Francois Hollande today issued a joint statement backing yesterday's pledge by ECB president Mario Drahgi to do "whatever it takes" to save the euro. With risk-appetite increasing, the Dow added more than 200 points for a second consecutive session to close above 13,000 for the first time since May. U.S. Treasury's dropped the most since March and the dollar fell, supporting gold's gains of 2.2% for the week. Silver added 0.2% for the day and 0.7% for the week. Platinum gained 0.2% and palladium gained 0.3% for the day, but they lost 0.4% and 0.7% for the week, respectively.

At the close: August gold gained $2.90 to $1,618; September silver added 5 cents to $27.50; October platinum rose $2.60 to $1,408.20; and September palladium increased by $1.95 to $571.85 an ounce.

More soft U.S. economic data has increased the odds of additional stimulus from the Fed. Consumer confidence has fallen to its lowest point this year, according to the University of Michigan-Thomson Reuters survey, with nearly half of all respondents reporting that their finances have worsened. In addition, the economy appears to be grinding to a halt, with GDP growth slowing to 1.5% in the second quarter of this year after 2% growth during the first quarter and 4.3% in the last quarter of 2011. The good news is that the slowing economy has also slowed inflation, which is down to 1.8% in Q2 from 2.4% in Q1, well under the Fed's target of 2%. Reduced inflation gives the Fed plenty of room to ease further, if not at next week's FOMC meeting then in September.