Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold inched 0.2% higher as upbeat U.S. economic data and reports that China will proactively stimulate its economy helped to spur demand for most commodities. Pending home sales matched a two-year high in May, according to the National Association of Realtors; and orders for durable goods rose 1.1%, which was more than expected. Equities and oil rallied on the news. Gold also received safe-haven support ahead of tomorrow's EU summit after attending leaders cast doubt on the likelihood of finding solutions to the region's debt crisis. The rest of the metals complex fell, with silver dropping 0.4%, platinum 1.2%, and palladium 2.4%.

At the close: August gold picked up $3.50 to $1,578.40; July silver slipped 10 cents to $26.94; July platinum fell $17.10 to $1,409.70; and September palladium lost $13.95 to $579.75 an ounce.

A semi-official commentary on the front page of the Shanghai Securities Journal revealed that China may introduce a variety of "more proactive" policies to ensure stable economic growth. According to Bloomberg, the measures may include expanding infrastructure investment, fine-tuning monetary policy, stabilizing foreign trade, and lowering reserve requirements for banks. In other words, substantial easing programs are on the way. Along with calls for increased monetary accommodation in the U.S., Europe, England, and Japan, China's new easing programs are likely drive up demand for commodities and risk of long-term inflation, both of which are bullish for gold.