Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold gained another 0.2% to close just under $1,261 as concerns about the global economy boosted safe-haven inflows. The metal rose for the fourth straight seesion to notch its longest winning streak in almost two months.

The IMF cut its global growth forecast again, saying spillover-effects from China's faltering economy and persistent weakness in Europe, Japan, and the U.S. have left the world vulnerable to currency devaluations and rising political tensions. In a separate communication, the IMF also warned that Greece's debt has become "highly unsustainable," requiring further bailouts and aid from its European partners.

Closer to home, U.S. small business confidence hit a two-year low in March, hammered by low profits and sales during the first quarter.

Oil surged 4.5% to its highest level of 2016 on speculation that Russia and Saudi Arabia have reached an historic agreement to stabilize production levels. In addition, a key U.S. energy agency cut its domestic output estimates and raised its price forecasts. Gold often tracks higher with oil as a hedge against energy-inflation.

The slowing global economy is prompting analyst to become more bullish on gold. RBC Capital Markets raised its forecast for gold to $1,300 by Q4. HSBC's head of technical analysis said today that the recent down cycle has ended and a new, substantial upward trend has begun, with an initial target of $1,500.

Hunger for safe havens is fueling an upswing in gold demand in China, the world's biggest gold consumer. Inflows into bullion-backed funds and ETFs have increased more than 300% so far this year, rising from 3.2 to 13.5 tons, and banks are creating new instruments for gold investments.

The other precious metals finished higher. Silver added 1.5%, reaching its highest close in more than five months, while platinum and palladium added 0.9% and 0.2%, respectively.

At the Comex close: June gold gained$2.90 to $1,260.90; May silver climbed 25 cents to $16.22; July platinum picked up $8.90 cents to $999.70; and June palladium added $1.35, to $544.15 an ounce.