Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold finished slightly higher to log a weekly gain of 1%, its best in two months, after rising inflation and plummeting consumer sentiment spurred demand for the metal as a store of value. An unexpected rise in gasoline prices caused the largest monthly spike in inflation prices since mid-2009, according to the Labor Department. The twelve-month core inflation rate, which excludes energy and food, rose to 2%. Growing price-pressure nudged traders back to gold, a traditional hedge against inflation. Because it remains well under the Fed's 2.5% target, the core rate is not expected to curb accommodative monetary policies when the FOMC meets next week. Continued monetary stimulus at home and abroad supports higher gold because it devalues currencies and increases inflation risk.

Consumer sentiment tumbled to its lowest reading in over a year, as measured by the Thomson Reuters index, because of growing pessimism over sequestration, the $85 billion in automatic government-spending cuts triggered by the Federal budget impasse. With roughly 70% of GDP attributable to consumer spending, the dismal report is raising new doubts about the economy's momentum in the coming quarter. The Dow ended its ten-day winning streak and dollar the fell, supporting higher gold prices. Silver added 0.2% today but lost 0.4% for the week. Platinum and palladium gained 0.2% and 0.6% today, respectively, but fell 0.7% and 0.9% for the week.

At the Comex close: April gained $1.90 to $1,592.60; May silver added 4 cents, to $28.85; April platinum picked up $2.60 to $1,592.40; and June palladium rose $4.90 to $775.65 an ounce.