Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold slid 0.7% to close just under $1,240 as the dollar strengthened and traders took profits from this week's astonishing rally. But the metal still finished the week 7.1% higher for its best weekly performance since December 2008, when the financial crisis crippled markets and sent panicked investors scurrying for safety.

Slowing global growth and negative interest rates in Europe and Japan have generated an extraordinary level of risk aversion so far this year, sending the Dow and S&P 500 lower by 9% while gold has surged by 17%. Plummeting oil prices have also driven demand for gold, which is seen as a store of value when other assets are losing theirs. Safe-haven Treasury bonds have risen alongside of gold to the highest prices in a year.

The dollar firmed against a basket of currencies, with the Dollar Index rising 0.5% after the Commerce Department reported that retail sales picked up by 0.2% in January, offering hope for better growth in the U.S. economy in Q1. Consumer spending accounts for around 70% of GDP. A stronger buck weighs on gold and other commodities by making them more expensive overseas.

Not all the day's data was positive, however. The University of Michigan reported consumer sentiment has fallen in February, with survey respondents growing more pessimistic about the economy. Inflation expectations also took a hit as import prices fell 1.1% last month, putting additional pressure on the Fed to forestall deflation.

The other precious metals were mixed on the day but strongly higher for the week. Silver finished nearly flat today, dipping less than a penny to close the week with a gain of 6.9%. Platinum dropped 0.5% for a weekly gain of 6%, while palladium gained 0.5% on the day and 5.7% on the week.

At the Comex close: April gold slid $8.40 to $1,239.40; March silver dipped half a cent to $15.79; April platinum lost $5.10 to $958.10; and March palladium gained $2.55 to $527 an ounce.