Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gold fell 0.9% to close at a 10-month low under $1,162 as divergent interest rate expectations between the U.S. and Europe boosted the dollar and undermined demand for alternative stores of value. The metal closed the week 1.1% lower, marking its fifth straight week of losses.

The dollar added 0.5% against major rivals as the euro fell to a 15-month low on follow-through from yesterday's decision by the European Central Bank to extend its program of quantitative easing through the end of 2017, though at a lower monthly amount. Tantamount to printing money, QE devalues a nation's currency by increasing the supply of it in circulation.

The buck was further supported by near-certainty that the Fed will raise interest rates by a quarter-point when it meets next week. With the ECB and Bank of England holding rates at or near historic lows, the increase in U.S. rates makes the dollar more attractive to investors in search of higher yield. In turn, a rising dollar pressures gold and other commodities by making them more expensive overseas.

The other precious metals were lower for the day and mixed for the week. Silver dropped 0.8% but gained 1.3% this week. Platinum fell 3.1% today and 1.7% this week. Palladium slid 0.5% for a weekly loss of 1.3%.

At the Comex close: February gold $10.50 fell $1,161.90; March silver dropped 13 cents to $16.97; January platinum lost $28.80 to $915; and March palladium slid $4 to $735.05 an ounce.