Daily Gold Update

Source: AGE

Austin— Gold closed at its highest level in 3 weeks and sustained its longest rally in 10 weeks today. Losses early in the trading session were reversed as gold for February delivery advanced $7.40, or 0.5%, to end at $1,620.10 an ounce on Comex. It had traded as low as $1,597.70 earlier today. Silver tracked gold in going from initial losses to substantial gains, with March silver rising 20 cents, or 0.7%, to end at $29.30 an ounce. Platinum and palladium extended losses from yesterday.

The big driver for gold and silver continued to be fear that Iran may close the straights of Hormuz, disrupting oil supplies and undermining the fragile world economy recovery. "Iran is gradually becoming a big source of concern, and people are worried what could happen next", according Michael Smith, the president of T&K Futures and Options in Port St. Lucie, Florida. Gold is gaining on the fear.� Dennis Gartman, an economist and the editor of the Gartman Letter, has become �officially bullish� on gold after the price slumped 3.4% last quarter.

In addition, gold was bolstered by a softening euro, which dropped to $1.28 on continued concerns about euro zone banks and a weak French bond auction, causing investors to sell euros and buy gold. But gold's rally was capped by a stronger U.S. dollar, which rose on U.S. private-sector jobs growth of 325,000 reported by ADP