Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold gained slightly to close just under $1,294 after almost hitting $1,306 in pre-session trade on optimism about resurgent demand in India, the world's second largest gold consuming nation. Following his decisive victory in the Indian national elections, new Prime Minister Narendra Modi is widely expected to cut gold import duties as part of his promise to strengthen the rupee. India accounts for around one-quarter of worldwide demand for gold. The imposition of drastic duties last year severely stifled demand and helped to erode the global gold price.

Gold's early gains were also supported by the announcement of a new European Central Bank gold agreement underscoring the importance of gold in bank reserves. While the pact did not limit the amount of gold that central banks can sell, it said that the signatory nations had no plans to sell significant amounts. Central banks have increased gold holdings by record amounts over the past few years to hedge against currency risk, lifting the gold price.

Gold's early gains eroded as U.S. equity markets gathered strength, with the Nasdaq jumping nearly 1%. Silver picked up 0.1% while platinum and palladium added o,3% and 0.1%, respectively.

June gold edged up 40 cents to $1,293.80; July silver added 2 cents, to $19.35; July platinum gained $4.10 to $1,470.20; and June palladium picked up 60 cents to $815.60 an ounce