Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold slid 0.6% in thin trade to close under $1,200 as positive U.S. consumer data dimmed its safe-haven appeal. Consumer sentiment rose to a five-month high in December, according to the Thomson Reuters/University of Michigan index, behind growing optimism about the economy and labor market. In addition, the Commerce Department reported that consumer spending rose in November by 0.5%, the fastest pace since June. Consumer spending accounts for more than 70% of overall GDP.

The upbeat reports stoked risk appetite, pushing the Dow and S&P 500 to new record highs while safe havens like precious metals and Treasury securities fell. Silver dipped 0.2% while platinum and palladium both lost 0.4%. Hedge funds and other money managers trimmed their bullish bets on gold by nearly 3% last week in reaction to the Fed's decision to curtail quantitative easing by $10 billion per month, starting in January. Tantamount to printing money, QE has supported higher prices for gold and other commodities by flooding the market with liquidity, devaluing the dollar, and increasing the risk of long-term inflation.

At the Comex close: February gold slid $6.70 to $1,197; March silver dropped 4 cents to close at $19.41; January platinum lost $4.80 to $1,327.40; and March palladium lost $3.10 to $695.65 an ounce.