Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold jumped 0.9% to close above $1,275 as rising oil, falling equities, and a weaker dollar spurred demand for alternative assets.

Brent crude surged 4% for the second straight day after the U.S. government reported lower oil inventories for the first time in nearly two months. Combined with recent closures of a Nigerian pipeline and a Canadian refinery, the latter due to wildfires in Alberta, the smaller U.S. stockpile suggests a reduction in the global supply glut that has sent oil prices tumbling over the past year. Gold often trades in positive correlation with oil as a proxy for future inflation.

Stocks faltered, with the Dow losing 1.2% and the Global Dow 0.5%, as disappointing corporate earnings soured traders' optimism. Yesterday the Dow notched its best session in two months, gaining 200 points on expectations that the Fed will refrain from tightening monetary policy until late this year or next year.

The dollar fell 0.5% against major rivals, breaking a six-day winning streak. A weaker buck supports gold and other commodities denominated in it for international trade by making them cheaper for foreign buyers.

The other precious metals also rose sharply, with silver picking up 1.3% while platinum and palladium climbed 1.6% and 2.7%, respectively.

At the Comex close: June gained $10.70 to $1,275.50; July silver picked up 23 cents to $17.32; July platinum climbed $16.80 to $1,066.10; and June palladium surged $15.85 to $608.05 an ounce.