Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold held nearly flat, inching down 0.1% to close just over $1,166, after signals of deeper quantitative easing from the ECB stoked risk appetite and rallied the dollar.

The dollar surged 1.3% and the euro fell to a three-week low after ECB Chief Mario Draghi strongly suggested that the central bank will expand its program of qualitative easing in December. The Bank of Japan is also expected to announce more monetary stimulus when it meets next week.

Tantamount to printing money, QE weakens the currency of the easing nation and boosts rival currencies as traders search for higher yields. It may also generate higher demand for gold and other alternative stores of value in Europe and Asia as investors seek out hedges against currency weakness.

A stronger dollar typically weighs on gold and other commodities denominated in it for international trade by making them more expensive to users of other currencies. The fact that gold held its ground despite this major dollar upsurge is an encouraging sign of support at current prices.

U.S. equities soared after Draghi's comments on hopes that additional stimulus will help to drive global growth. The Dow gained around 320 points, or 1.9%.

The other precious metals finished higher, with silver adding 0.8% while platinum and palladium picked up 0.6% and 1.3%, respectively.

At the Comex close: December gold dipped $1 to $1,166.10; December silver added 13 cents, to $15.837; January platinum picked up $5.80 to $1,012.90; December palladium gained $8.45 to $685.60 an ounce.