Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold fell 0.7% today while the dollar gained for the tenth consecutive session as nervous investors continue to eschew risk. China's weakest growth in industrial output since 2009 offset the strongest U.S. consumer sentiment report in four years to drag equities lower. U.S. Treasury bonds rose again for an eight-day winning streak, their longest since 1998. Risk appetite was also damaged by the news that JP Morgan lost $2 billion trading on credit derivatives. With safe-haven demand shifting to the dollar and Treasury bonds, gold fell 3.7% for the week. Silver lost 1% on the day and 5.1% for the week. Sister metals platinum and palladium fell harder, losing 1.5% and 1.9% today. For the week, platinum lost 4.2% and palladium 7.5%

At the close: June gold fell $11.50 to $1,584; July silver dropped 29 to $28.89; July platinum lost $22.40 to $1,471.40; and June palladium fell $11.95 to $603.40 an ounce.

It's been a tough week for gold, breaking to new lows for the year while global investors moved emphatically into cash. After elections in Greece and France ousted leaders who supported the Germany-led austerity program for containing the sovereign debt crisis, fears of instability in the euro zone took over. Near-term liquidations could continue. Fewer than half of the gold traders surveyed by Bloomberg think gold prices will rise next week. Barclays is now forecasting gold to reach $1,716 this year, lowering its previous forecast by 8% because of concerns over Europe and China.

At least one prominent economist, however, thinks gold is going much higher. In an interview today with the Financial Times, David Rosenberg, chief economist and strategist with Gluskin Sheff, said gold had been over-bought but is now largely off the radar, making it a good bet. In his view, the stock markets are repeating the downturns of 2010 and 2011 that resulted in quantitative easing in the U.S., Japan, and Europe. He believes negative real interest rates for the next few years will combine with more easing from the same central banks to drive gold above $3,000 an ounce before its current bull cycle ends.