Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.2% in choppy trade to close at $1,326 on safe-haven bids after U.S. equites tumbled in response to growing doubts about an OPEC agreement and the stability of Europe's banking system.

OPEC reached a preliminary agreement late yesterday to support oil prices by capping production slightly below current levels. The deal boosted energy shares, pushing equity indexes higher and pressuring safe-haven assets like gold.

But the initial euphoria quickly subsided, pulling stocks lower, as traders questioned the amount of the cut�around 2%–and whether it would have significant impact on the global oil glut.

Stocks then fell further, with the Dow dropping 0.75%, on a report that Deutsche Bank, one of the largest banks in the EU, may be on shaky footing. With a pending $12 billion fine from the U.S. Justice Department to settle mortgage-securities infractions during the 2008 financial crisis, and with current debt-securities plunging in value, the bank may have difficulty raising enough cash, according to the report.

The dollar trimmed early gains against major rivals as traders returned to safe havens like gold and the yen in light of the retreat of stocks. U.S. Treasury bonds also rallied on the EU banking concerns, while data showing U.S. home sales slumped to the lowest level in seven-months further pressured the greenback

The other precious metals were also higher, with silver adding 0.4% while platinum and palladium picked up 1% and 0.7%, respectively.

At the Comex close: December gold gained $2.30 to $1,326; December silver rose 7 cents to $19.19; January platinum added $10.20, to $1,037.20; and December palladium picked up $5.10, to $719.50 an ounce.