Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.2% to close above $1,395, and then climbed another $7 to $1,402 after hours, as surging purchases of physical gold in the U.S. and Asia buoyed the price. In the wake of the devastating technical sell-off in the paper gold markets earlier in the week, which knocked gold futures down to $1,561, primarily on liquidations by large institutional traders and hedge funds, pent-up demand for cheaper physical gold is again lifting the market. Bloomberg reports that traders and banks in India are running out of gold because of a huge increase in purchases of gold coins and jewelry, and traffic in bullion has been soaring in Hong Kong and Macau for the past three days. The U.S. Mint is seeing the strongest demand for bullion coins in nearly three years, selling 167,500 Gold Eagles and 19,000 Gold Buffaloes so far in April, more than three times the total for all of last month.

Gold rose despite a stronger dollar after Fitch Ratings lowered Britain's credit rating because of economic weakness and fiscal problems. A stronger dollar typically weighs on gold because it becomes more expensive to holders of other currencies. Still, gold futures finished the week with a 7% loss and more short-term weakness may follow before the market consolidates. The other metals were mixed today. Silver fell 1.2% today and 13% for the week. Platinum slipped 0.4% for a weekly loss of 4.8%. Palladium gained 1.1% for the day but still lost 4.5% on the week.

At the Comex close: June gold rose $3.10 to $1,395.60; May silver dropped 29 cents to $22.96: July platinum lost $5.10 to $1,429; and June palladium added $7.25, to $677.05 an ounce.