Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Following two days of modest gains, gold finished flat before adding 0.4% after hours on speculation that additional monetary easing by the world's central banks is on the way. Canada announced that stimulus will continue for an indefinite period in a bid for economic growth. The ECB and the Bank of England, meeting later this week, are expected to extend monetary stimulus. The Reserve Bank of Australia said yesterday that benign inflation gives it room to ease further. And the likely next governor of the Bank of Japan, Haruhiko Kuroda, recently vowed to undertake an open-ended program of quantitative easing similar to the Fed's.

The race to debase is underway, which is bullish for gold because it increases the risk of long-term inflation and undermines faith in paper currencies. David Rosenberg, chief economist and strategist at Gluskin Sheff, today reaffirmed his target price of $3,000 an ounce for gold, largely because of the consequences of quantitative easing at home and abroad. Gold's gains in electronic trade were especially impressive against the backdrop of a rising dollar, which tends to weigh on the gold price, and another record-high close by the Dow. The other metals were mixed, with silver and palladium each gaining 0.7% while platinum dropped 0.4%.

At the Comex close: April gold finished unchanged $1.574.90; May silver gained 20 cents to $28.80; April platinum dropped $5.90 to $1,579.80; and June palladium added $5.45, to $740.05 an ounce.

Gold received added support from news of fresh central bank buying. The Bank of Korea purchased 20 metric tons in February, raising its reserves by 24% to more than 104 tons. Officials said the purchases are part of its "long-term diversification of currencies and assets in foreign-exchange reserves." According to the World Gold Council, central banks increased their gold purchases by 17% last year, buying a total of 534.6 tons, largely to hedge their exposure to the dollar, the euro, and the effects of global easing.