Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold jumped 1.6% to close just under $1,259 on safe-haven demand as soft factory data in the world's two largest economies triggered a sell-off in equity markets. The ISM index of U.S. manufacturing tumbled nearly 5% in January to an eight-month low and new-orders plunged by the most in 33 years. China's official PMI also fell as manufacturing in the global powerhouse has stalled nearly into contraction. Global stocks plunged on the data, with the Dow losing nearly 2.2% and the Global Dow 1.7%.

The dollar fell against most rivals and 10-year Treasury yields hit a three-month low as investors sought refuge. Hedge funds and other large speculators increased bullish bets on gold by 40% last week to a six-month high on fear of contagion as emerging market currencies, hammered by negative real interest rates and a generally stronger dollar, extended their biggest sell-off in five years. Silver rallied 1.5% and platinum picked up 0.8% while palladium dipped 0.1%.

At the Comex close: April gold jumped $20.10 to $1,259.90; March silver gained 29 cents $19.41; April platinum added $10.90, to $1,386.60; and March palladium dipped 50 cents to $702.70 an ounce.