Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold jumped nearly 1%, punching through resistance at $1,300 to close just under $1,306, as escalating violence in the Ukraine combined with rising U.S. wholesale inflation and a falling dollar to spur demand for alternative stores of value.

Pro-Russian militants ambushed a Ukrainian armored column, killing at least seven in one of the conflict's deadliest skirmishes so far. By most accounts, the nation is teetering toward civil war, which would severely destabilize the region and adversely affect the global economy.

In April, the U.S. producers price index unexpectedly jumped 0.6%, the most in 18 months, largely because of rising prices for food and services. Inflationary pressures, which critics of the Fed's easy money policies have long been expecting, are generally considered a bullish indicator for gold.

The dollar slipped against major rivals despite the growing likelihood that the ECB will provide deeper monetary easing in the near future, undermining the value of the euro. A softer dollar typically boosts demand for precious metals and other commodities denominated in the U.S. currency for international trade by making them less expensive for holders of other currencies.

Silver added 1.2% to close at a one-month high while platinum and palladium, buoyed by supply worries because of new labor violence at South African mines, surged 2% and 1.4%, respectively.

At the Comex close: June gold gained $11.10 to $1,305.90; July silver jumped 23 centsto $19.78; July platinum surged $29.70 to $1,485.70; and June palladium picked up $11.50, to $828.80 an ounce.