Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.5% to close above $1,279 despite a sharply higher dollar as risk appetite ebbed and oil prices hovered near a six-month high.

The dollar rose another 0.6% to trade at a fresh 22-month high as several G-7 rivals fell on weak economic data. The euro dropped nearly 0.8% after Germany's Ifo Business Climate Index fasil to meet forecasts. The Aussie dollar tumbled 1.1% on flat inflation, and the Canadian dollar slid 0.7% after the central bank held interest rates unchanged.

A rising dollar typically weighs on gold and other commodities priced in it for global trade by making them more expensive overseas. But oil's recent rally to a six-month high, fueled by the cessation of US waivers for buying Irian production, helped the metal to rally as investors sought a hedge against energy-related inflation.

The S&P 500 and Nasdaq edged down from yesterday's record closes as weaker-than-expected earnings reports dulled risk appetite, adding to gold's allure.

The other precious metals were mostly higher, with silver and palladium climbing 0.9% and 2.1%, respectively, while platinum slid 0.6%.

At the Comex close: June gold gained $6.20 to $1,279.40; May silver rose 13 cents to $14; July platinum dropped $5.20 to $888.60; and June palladium jumped $29.50 to $1,405.10 an ounce.