Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gaining for a second session, gold added 0.2% to close above $1,249 as a lower dollar and higher oil prices boosted demand for alternative stores of value. It was the metal's fifth rising session in the last seven.

The dollar extended its losses, dropping nearly 0.5% against major rivals, and hit a one-year low against the euro as traders speculated that the European Central Bank and Bank of England will begin to scale back monetary stimulus. A falling dollar supports commodities priced in it for international trade by making them less expensive in other currencies.

ECB chief Mario Draghi said yesterday that inflation is now more concerning than deflation in the Eurozone, suggesting a change in monetary accommodation. Mark Carney of the BoE said today that higher interest rates will be considered in the next few months. Meanwhile, subpar U.S. growth and inflation may postpone another rate hike from the Fed this year.

Gold was also supported by oil's fifth straight day of gains. West Texas Crude rose another 1% to close around $44.75 as government data revealed a large weekly decline in U.S. oil production. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

A rally in equities capped gains for safe-haven assets, with the S&P 500 jumping 0.9% for its biggest day in two months behind a surge in tech and financial stocks.

The other precious metals were mostly higher, with silver and platinum rising 0.8% and 0.4%, respectively, while outlier palladium dropped 0.4%.

AT the Comex close: August gold added $2.20, to $1,249.10; September silver rose 14 cents to $16.79; October platinum picked up $3.30 to $924.20; and September palladium slipped $3.75 to $854.60 an ounce.