Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold traded nearly flat, dipping 0.1% at the close but pulling even after hours, as another round of positive U.S. data strengthened the dollar. The Conference Board's index of leading indicators rose 0.4%, its largest gain since February, because of an improved housing market and fewer firings in the labor force. In addition, U.S. consumer sentiment improved unexpectedly in August after two straight months of decline, raising the prospect of increased spending this fall. The upbeat data lifted equities and rallied the dollar, which pressured the gold price. Silver followed gold lower, losing 0.7%, while sister metals platinum and palladium rose strongly after violence against strikers at South Africa's Lonmin mine raised concerns of supply interruptions. Platinum rallied 2.6% and palladium 3.7%

At the close: December gold dipped $1 to $1,618.20; September silver dropped 19 cents to $28.02; October platinum rallied $37.90 to $1,473.10; and September palladium leapt $21.85 to $605.30 an ounce.

Gold received some support from a rising euro after reports that Germany's Angela Merkel is open to easing Greece�s bailout terms, making it more likely that the insolvent nation will qualify for aid next month and remain in the eurozone. Speaking in Canada yesterday, Merkel also said Germany is "committed to do everything we can to maintain the common currency." A rising euro keeps the dollar in check, which helps the gold price.

While positive U.S. data and assertions of euro solidarity are welcome, they hardly ensure a global economic recovery. As Bloomberg reports, gold traders are at their most bullish in six weeks because slowing global growth is expected to bring additional monetary easing from central banks around the world. Legendary investors John Paulson and George Soros apparently agree. Paulson increased his holdings in SPDR Gold Shares, the word's largest gold-backed ETF, by 26% to $3.3 billion last quarter, while Soros more than doubled his stake. Capital Economics, a leading economic research consultancy, is now predicting gold prices of $2,000 an ounce by year-end, believing that an escalating eurozone crisis will drive safe-haven investment this fall.