Daily Gold Update

Source: American Gold Exchange

Austin— Gold reversed early losses to gain today for the third straight session on dollar weakness and safe-haven buying. Buoyed by the Fed's pledge on Wednesday of near-zero interest rates until late 2014 and follow-up comments by Ben Bernanke that more monetary easing may be forthcoming, gold picked up 4.1% for the week. Not to be outdone, silver surged 6.7% for the week and platinum 5.9%. Palladium was the laggard, gaining only 2.1% on the week.

At the Comex close: February gold added $5.50 to $1,732.20; March silver gained 5 cents to $33.79; April platinum rose $6.20 to $1,623; and March palladium dipped $4.30 to $690.15 an ounce.

After gaining 10% so far in January, gold is off to its best start of a year since 1980, when it eventually rocketed to a then-record high of $850, the equivalent of around $2,250 in today's dollars. Whereas inflation was the main driver during that historic rally, it's played almost no role in gold's current bull market�at least, so far. Global Pacific Capital CEO Peter Schiff wrote recently that "the Fed is choosing to ignore all signs that CPI inflation is currently running north of 3%." Similarly, Jeffrey Wright of Global Hunter Securities believes �Inflation is in the market [but] just being under-reported" in order to give the Fed cover for continued easing. Schiff concludes that "those wise enough to park savings in gold will likely see continued success."

With the oceans of money being printed in the U.S. and eurozone to keep our economies afloat, and with current U.S debt exceeding $15.4 trillion (plus an increase of $1.2 trillion pending), inflation could easily become the genie that refuses to go back in the bottle when and if economic stability is achieved. Investors are already responding to this longer-term possibility, one that could support gold prices for years to come.