Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold jumped 0.7%, closing above $1,061 after the European Central bank announced a smaller expansion of monetary easing than expected, rallying the euro and increasing the demand for alternative assets.

The ECB extended its program of quantitative easing by six months, held monthly purchases of bonds at 60 billion euros, and cut its deposit rate a little further into negative territory. The changes were less than the market anticipated, especially after ECB chief Mario Draghi recently renewed his promise to do "whatever it takes" to jumpstart growth and combat deflation in the beleaguered Eurozone.

The euro rallied hard after the announcement, hitting a one-month high in its biggest movement against the dollar since 2009. Tantamount to printing money, quantitative easing devalues a nation's currency. Traders had already priced-in a much bigger package in recent weeks, pressuring the euro and boosting the dollar. The surprisingly shallow easing sparked a reversal in that trade.

The dollar plunged more than 2% against a basket of rivals, supporting gold and other commodities denominated in it for international trade. U.S. stocks also sold off, with the Dow and S&P 500 tumbling 1.4% each in their biggest one-day drops in two months.

The other precious metals tracked higher with gold. Silver added 0.5% while platinum and palladium surges 1.8% and 2.1%, respectively.

At the Comex close: February gold jumped $7.40 to $1,061.20; March added nearly 7 cents, to $14.08; January platinum gained $15.10 to $847.50; March palladium surged $11 to $536.80 an ounce.