Daily Gold Update

Source: American Gold Exchange

Austin— Silver surged 3.6% and gold jumped 1.5% today, closing at its highest level since December 11, behind a weaker dollar and the belief that more monetary easing will be forthcoming from the U.S., Europe, and even China. Higher gold was also supported by expectations that Iran may yet interrupt global oil supplies by closing the Straits of Hormuz, and by lingering concerns over the spread of the EU debt crisis. At the Comex close: February gold added $23.40 to settle at $1,631.50; March silver surged $1.03 to $29.82; March palladium rose $17.35 $635.20; and April platinum gained $35 to finish at $1,464.60 an ounce.

The dollar sold off for the second straight day on signals that European leaders are taking steps to stem the spread of their debt crisis. Looser monetary policies are expected as the ECB increased its debt purchases this week to help lower borrowing costs and increase liquidity in Spain and Italy, and is likely to keep its benchmark rate at a record low 1% on Jan. 12. Yet the markets are also concerned that the auctions of Spanish and Italian government bonds due at the end of the week may come up short, and this fear has lent some safe-haven support to gold. Even China may be getting into the easing act. To stimulate its flagging economy, "China is likely to ease monetary and fiscal policies in the first half of this year," said David Kelly, chief market strategist for JPMorgan Funds in New York.

Tracking gains in other commodities and equity markets, gold's strong movement above its 200-day moving average did much to dispel any lingering concerns over recent softness. Global demand for physical gold is on the upswing as buyers in China, Taiwan, Hong Kong, Vietnam and Thailand are expected to boost gold purchases before the Lunar New Year, starting on January 23, according to U.S. Global Investors Inc. The U.S. Mint has sold 79,000 ounces of gold coins already in January, topping total sales in December of 65,500 ounces and far surpassing sales in November and October. The Mint also sold 3.96 million ounces of American Eagle silver coins in January, more than the combined total for the previous two months.