Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold rebounded by 1% and silver 2.2% today as bargain hunters entered the market after this week's steep sell-off. Platinum picked up 0.6%, palladium 1.9%, and oil 1.8% while the Dow dropped for the second day. Adding safe-haven support to gold, the euro sank to a three-week low against the dollar after a renewed rise in Spanish and Italian bond yields reignited sovereign debt fears. Despite today's gains, all four precious metals lost for the week, with gold down 2.5%, silver 2.3%, platinum 2.2%, and palladium 1.4%

At the close: June gold recouped $16 to $1,630.10; May silver added 69 cents to $31.73; July platinum rose $9 to $1,607.60; and June palladium rose $12.05 to $644.80 an ounce.

Gold sold off strongly this week after minutes from the March Federal Reserve meeting showed only three of twelve voting members supporting another round of monetary easing unless the economic outlook deteriorates. Right up until last week, speculators were increasing their wagers that more easing would drive higher gold prices this spring. As Bloomberg reports, hedge funds raised their net-long positions by 15% as of March 27, according to CFTC data. When momentum shifted away from QE3 this week, these speculators took their profits and changed their bets, pulling gold even lower. Bloomberg's survey of gold traders shows more than half expect negative market sentiment to continue next week.

The head of commodity research at Comerzbank AG in Frankfurt, Eugen Weinberg, told Bloomberg TV today that "negative near-term momentum" may persist in the gold market because of "decreased safe-haven demand" as the U.S. economy improves. Nonetheless, he called this week's drop "definitely a good buying opportunity" and expects the gold price to reach an "all-time high" this year as a result of "negative real interest rates, inflation risk, and long-term concerns about the economy."