Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold rallied 1.4% for its largest single-session gain since November after the European Central Bank left interest rates unchanged and data showed exports surging in China. Upbeat comments by ECB President Mario Draghi about the eurozone's growing financial stability drove the euro to a three-month high against the dollar and decreased the prospect for rate-cuts in the near term. With U.S. benchmark rates stuck near zero and the eurozone's at 0.75% for the foreseeable future, currency traders shifted from dollars to euros to take advantage of higher yields. A weaker dollar supports higher gold prices by making gold and other commodities, which are denominated in dollars internationally, less expensive to holders of other currencies. The other precious metals outpaced gold's gains, with silver jumping 2.2%, platinum 2.1%, and palladium 2%.

At the Comex close: February gold rallied $22.50 to $1,678; March silver rose 67 cents, to $30.92; April platinum jumped $34.30to $1,634.30; and March palladium gained $14 to $702.20 an ounce.

Precious metals and other commodities also got a jolt from data showing that China's recovery may be gaining strength. Chinese exports in December jumped by more than 14% from a year ago and imports rose by 6%, indicating that manufacturing and consumption are both on the upswing in the world's second-largest economy. Faster growth in China boosts industrial demand for platinum and palladium, which are used in auto manufacturing, and monetary demand for gold and silver as hedges against inflation. China is at once the world's largest producer and importer of gold.