Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold fell 0.7% to close at a 10-week low under $1,270 after dovish policy moves by the European Central Bank rallied the dollar and stocks, dulling appetite for alternative assets.

The ECB announced today that it will extend its bond-buying program, known as quantitative easing, until September 2018 while reducing the size of its monthly purchases. QE had been scheduled to expire in two months, so the extension took markets somewhat by surprise. Tantamount to printing money, QE effectively devalues the euro by increasing the amount of liquidity in the market.

The dollar jumped 1% to a three-month high and the euro plunged after the ECB announcement, pressuring gold and other commodities denominated in the buck for international trade. Stocks rose in response to the dovish news and some improved corporate earnings reports, with the Dow recouping almost all of yesterday's 0.5% drop.

Gold's losses were backstopped by a spate of soft US economic data. Jobless claims rose by 10,000 last week. The trade deficit widened by 1.3% in September as exports continue to lag imports. And pending home sales dropped to a 30-month low, hampered by low inventory.

The other precious metals were mostly low, with silver and platinum sliding 0.7% and 0.5%, respectively, while palladium rose 1%.

At the Comex close: December gold fell $9.40 to $1,269.60; December silver dropped 12 cents to $16.81; January platinum lost $4.60 to $922.10; and December palladium rose $10 to $968.10 an ounce.