Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold gained nearly 1% to close above $1,262 before adding another $7 in after-hours trade as investors looked past the Fed's decision to taper further, concentrating instead on safe-haven buying for protection against currency contagion in emerging markets. Reductions in U.S monetary stimulus are causing a flight out of emerging markets, weakening currencies from Turkey to Brazil to South Africa and boosting demand for gold as an alternative store of value. Turkey doubled interest rates to 12% last night in order to stem the outflow, and South Africa followed suit by raising key rates today.

As expected, the Fed voted to trim quantitative easing by another $10 billion in February, reducing its buys to $65 billon per month. The news had little effect on gold, which had largely priced in the deeper taper, whereas U.S. equities tumbled after the Fed decision, with the Dow dropping 1%. The other metals were mixed. Silver picked up 0.3% while platinum and palladium, more tied to industry, fell 0.1% and 0.8%, respectively.

At the Comex close: April gold gained $11.70 to $1,262.20; March silver picked up 5 cents to $19.55; April platinum dipped $1.30 to $1,408.10; and March palladium fell $5.35 to $711.15 an ounce.