Daily Gold Update

Source: American Gold Exchange

Austin— Gold slid for a second day while the dollar rose as Greece failed once again to approve the measures needed to secure a second round of bailout funding. Oil and equities also lost ground. Gold lost 2% in the last two trading sessions but remains up nearly 10% for the year. Platinum and palladium followed it lower today while silver traded flat.

At the Comex close: April gold lost $15.40, to $1,724.90; March silver stayed at $33.75; April platinum slid $2.10 to $1,629.80; and March palladium dropped $2.90 to $705.95 an ounce.

Greece's tortuous negotiations are coming down the wire. In order to qualify for another 130 billion euros in aid from the so-called troika�the EU, IMF, and ECB�Greek leaders have to pass a list of painful austerity measures, which they are loath to do with elections coming up. After many delays, spending cuts worth 1.5% of GDP this year have finally been approved. That was the easy part. Now the politicians have to approve labor reforms, wage and pension cuts, and job cuts, all of which are deeply unpopular with Greece's entrenched special interests. As the New York Times reported last week, "the main power centers in Greece�political parties, business leaders, professional guilds, public sector unions and the media�are fighting to preserve their privileges, blocking structural changes that could make the economy more functional." So the special interests are engaged in a game of chicken that could soon send Greece over the precipice. One week from today, February 13, is seen as "realistically the last possible date" to avoid a messy and damaging default when Greek bonds roll over on March 20.

The world economy could easily accompany Greece over the edge. The IMF predicted today in its "China Economic Outlook" that China's growth rate may be cut in half this year, from 8.2% to 4.2%, if the Europe sovereign debt crisis worsens. Sizable fiscal stimulus would be forthcoming from the Chinese government, the IMF believes. The Fed would almost certainly step in with another round of quantitative easing itself, which many analysts believe will happen anyway, despite last week's positive jobs reports.