Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.3% as improving U.S. economic indicators combined with news of a cease-fire between Israel and Hamas to spur moderate risk-on sentiment. The Conference Board's index of leading economic indicators rose in October, prompting it to forecast "modest" expansion in the U.S. economy through early 2013. Consumer sentiment hit a five-year high in November; manufacturing grew at its fastest pace in five months; and initial jobless claims dropped sharply. These signs of recovery, along with an improving housing market, caused equities to extend yesterday's gains. Commodity-demand for precious metals also rose, with silver gaining 1.3%, platinum adding 0.7%, and palladium jumping 2%.

At the Comex close: December gold gained $4.60 to $1,728.20; December silver rose 42 cents to $33.35; January platinum added $10.90 to $1,583.90; and December palladium jumped $12.95 to $651.30 an ounce.

Gold is also finding support from increased buying by central banks. The IMF reported today that Brazil bought another 17.2 tons last month, increasing its gold reserves to more the 52 tons, the highest level in more than eleven years. Turkey added 17.5 tons and Kazakhstan bought 7.5 tons. Central banks are adding to gold reserves in record amounts to diversify away from currency risk and hedge against the risk of long-term inflation. This trend is expected to continue and should put a floor under higher gold prices.