Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold added 0.4%, gaining for its third session in four, on safe-haven inflows from Europe and expectations of accelerated monetary easing in Japan. The euro tumbled after polls in Italy showed Silvio Berlusconi gaining in popularity, increasing his odds of becoming the next Prime Minster. Berlusconi is considered a threat to Italy's hard-won financial stability because he has promised to roll back some of the austerity measures that are hated by most Italians but required by creditors and the ECB to prevent default. European stock markets were roiled by the concerns, driving traders into gold and the dollar as they await this week's ECB meeting for further direction on monetary policy. Silver finished flat while palladium slipped 0.1%. Platinum jumped 1.7% on concerns that supplies will be further curtailed because of strikes and other mining problems in South Africa, which accounts for nearly three-quarters of global production,

At the Comex close: April gold added $5.30 to $1,678.80; March silver finished unchanged at $31.88; April platinum jumped $29.30 to $1,736.50; and March palladium dropped 65 cents to $764.80 an ounce.

Gold received support in Asia from the announcement that Bank of Japan Governor Masaaki Shirakawa will step down three weeks early, paving the way for accelerated monetary easing in the world's third-largest economy. Prime Minister Shinzo Abe has called for aggressive easing in order to pull Japan out of deflation by stimulating inflation. Shirakawa's successor will be chosen to support Abe's campaign to devalue the yen. Monetary easing spurs demand for gold as a store of value and hedge against inflation.

In addition, China's central bank warned today that monetary easing in Japan, Europe, and the U.S. is likely to spur inflation and drive up prices for commodities. Rising commodity prices generally imply higher prices for gold, which trades both as a commodity and safe-haven asset. China's gold imports nearly doubled last year on rising purchases by the People's Bank of China and individual investors.