Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.2% in thin trade as a new round of easing from the Bank of Japan boosted demand for the metal as an inflation hedge. The BOJ announced that it will increase its asset-purchasing program by another $138 billion in order to combat deflation and stimulate growth. Similar to quantitative easing in the U.S. and U.K, which helped to drive gold's 11% gain in the third quarter, the new stimulus from Japan is tantamount to printing money and raises the risk of long-term global inflation. Gold was also supported by a weaker dollar, which fell the most in two weeks because of speculation that hurricane Sandy will do less damage than originally feared. New York financial markets were closed again because of Sandy, although Globex, the Comex electronic exchange, remained open. The other precious metals also rose, with silver adding 0.6%, platinum 1%, and palladium 0.3%.

On Globex: December gold gained $3.10 to $1,711.80; December silver picked up 18 cents to $31.92; January platinum rallied $14.60 to $1,548.50; and December palladium rose $1.55 to $591.30 an ounce.

Some good news from the eurozone helped to weigh on the dollar and boost gold's commodity demand. European stocks rose by the most in two weeks after blue chips like BP and Deutsche Bank beat earnings forecasts. And Spain announced that its budget deficit narrowed in September by more than forecast. Both developments raised hopes that the region's economies may bounce back sooner than expected.