Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold rallied 0.7% and the dollar weakened after U.S. home prices and consumer confidence data came in softer than expected. The S&P/Case-Shiller index of home prices dropped sharply in February to its lowest in a decade because of high unemployment and tough credit conditions. And the Conference Board's gauge of consumer confidence fell for the second straight month as higher gas prices, higher jobless claims, and a dropping stock market all took their toll. Also supporting gold was speculation that this week's FOMC, in light of weaker economic data and turmoil in the eurozone, could produce dovish hints about additional easing, which would further weigh on the dollar. Silver followed gold higher, gaining 0.7%, while platinum and palladium both retreated with less safe-haven appeal.

At the close: June gold gained $11.20 to $1,643.80; May silver rose 21 cents to $30.75; July platinum slipped $8.20 to $1,548.10; and June palladium dropped $5.10 to $665.80 an ounce.

The IMF reported today that central banks added strongly to their gold reserves last month. Mexico led the way by adding 16.8 metric tons, worth around $906 million, followed closely by Russia's 16.5 and Turkey's 11.5 tons. A number of smaller emerging-market nations added lesser amounts. All are taking advantage of the current dip in the gold price to diversifying their reserves away from U.S. dollars. According to the World Gold Council, central bankers bought some 440 tons last year, the most in 50 years, and are expected to buy more than that this year. This ongoing government demand promises a solid floor for the gold price.