Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold rose 0.7% to its highest price in nearly six months after ECB President Mario Drahgi, as expected, announced a detailed program to buy the bonds of beleaguered eurozone nations. The plan stoked global risk appetite, rallying commodities and driving the S&P 500 to its highest level since 2008. The euro jumped to a two-month high; the dollar dropped and Treasurys hit a three-week low as investors shifted monies out of safe havens. Gold, which can trade as a safe haven or a risk asset, tracked commodities higher and received a lift from the falling dollar. But its gains were curtailed after ADP reported that over 200,000 private-sector jobs were added in August, casting a shadow on prospects for another round of quantitative easing from the Fed later this month. Silver outpaced gold by gaining 1.1% while platinum and palladium added 0.7% and 0.1%, respectively.

At the close: December gold gained $11.60 to $1,705.60; December silver rallied 34 cents to $32.67; October platinum added $10.80, to $1,586.40; and December palladium, gained 80 cents to $647.75 an ounce.

Citi foreign exchange analyst Tom Fitzpatrick expects gold to reach $2,500 in the next six months, based on technical similarities to its big breakout in 2007. In a note to clients today, as Business Insider reports, Fitzpatrick compared the current gold market to the start of the six-month acceleration that resulted in a rally of 60% in 2007. He says Citi believes "this trend could end up giving us a similar percentage move to that seen in the 1979-1980 bull market," which would bring gold to "an ultimate peak closer to $3,400 to $3,500." Whether or not it reaches that lofty height, Fitzpatrick says, "we believe this move is far from over and still expect gold to be an outperforming asset for some years to come."