Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— After gaining 1.3% over the previous three sessions, gold slid 0.4% to close above $1,208 as a surprise cut in interest rates by China helped to boost the dollar, reducing demand for alternative stores of value.

Concerned about falling growth and tighter credit, China cut benchmark lending and deposit rates over the weekend, joining the ECB, Japan, Switzerland, Canada, and Singapore in recent policy shifts to cheapen their currencies through deeper monetary easing. Global central bankers are pumping additional cash into their economies to stimulate consumer spending, business investment, and growth in exports.

The dollar ticked up in response to China's rate cut, supported by expectations that the Fed is on the opposite course and will tighten monetary policy later this year. A rising dollar weighs on gold and other commodities denominated in it for international trade by making them more expensive to users of other currencies.

A spate of soft U.S. economic data was largely ignored by currencies traders. Consumer spending fell for a second straight month in February and manufacturing expanded at its slowest pace in a year.

In bullish news for gold, imports of the metal into India are projected to surge to 100 metric tons in March from 25 tons in February on pent-up demand ahead of the Hindu festival and wedding seasons.

The other precious metals were mixed, with silver dropping 0.7% while platinum and palladium picked up 0.4% and 1.5%, respectively.

At the Comex close: April gold slid $4.90 to $1,208.20; May silver dropped by 10 cents to $16.451; April platinum picked up $4.30 to $1,189.90; and June palladium gained $11.60 to $831.10 an ounce.