Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.2% to close above $1,240 as accelerating consumer prices spurred demand for the metal as an inflation hedge. The CPI increased by 0.3% in December, the fastest pace in five months, led by rising energy and housing costs. While annual inflation was tame at 1.5% for 2013, the current rise is giving investors pause. The Fed's $4 trillion balance sheet, accumulated over nearly five years of printing money via quantitative easing, increases the risk that inflation could jump far and fast when the economy gains real traction.

Gold was also supported by safe-haven bids after reports that U.S home builders lost some confidence in the housing recovery, with the NAHB index dropping in January and revised lower in December. U.S. equity markets rolled back, with the Dow dropping 0.4%, while the dollar slipped against most rivals. The other precious metals were mixed. Silver dropped 0.4% while platinum added 0.2% and palladium finished virtually flat with a 10 cent loss.

At the Comex close: February gold gained $1.90 to $1,240.20; March silver dropped 8 cents to $20.05; April platinum added $2.90, to $1,431.50; and March palladium edged down 10 cents to $743.90 an ounce.