Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold lost another 2.3%, closing under $1,172, as the dollar surged in response to the Bank of Japan's surprising decision to expand monetary stimulus. The metal finished the week down 5.3%, its biggest weekly drop since June 2013.

In a move that shocked financial markets, the BOJ expanded quantitative easing, its program of buying government bonds to increase the money supply and combat deflation in its floundering economy. The dollar rallied nearly 0.9% against major rivals, surging to a seven-year high against the yen. A rising dollar pressures gold and other commodities denominated in it for international trade by making them more expensive to users of other currencies.

Gold was already under pressure this week after U.S. economic growth came in stronger than expected in the third quarter at 3.5%, and the FOMC issued a slightly more hawkish policy statement, suggesting that interest rates could rise sooner than anticipated if data warrant. Higher rates strengthen the dollar.

Equity markets jumped higher after the BOJ announcement, with the Dow and Global Dow both adding 1.2%. The other precious metals were mostly lower. Silver added a loss of 2.1% to yesterday's 4.9% plunge close the week down 6.2%. Platinum fell 0.9% today and 1.2% this week. Palladium was the outlier, gaining nearly 1.5% today to finish the week 1.4% higher.

At the Comex close: December gold lost $27 to $1,171.60; December silver dropped 31 cents to $16.11; January platinum fell $10.70 to $1,235; and December palladium gained $11.10 to $791.80 an ounce.