Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold slipped 0.6% after gloomy eurozone economic news curbed international appetite for risk. Driven by deep austerity measures and a contracting economy, Greece's jobless rate climbed above 23%, a new record, with nearly 55% of workers under 25 years old unemployed. Greek GDP shrank at an annualized rate of 6% in the second quarter. And a new lawsuit was filed in Germany against the European Stability Mechanism (ESM), the eurozone's primary bailout facility. The suite will impede incipient plans by the ECB to use the ESM for purchasing the debt of Greece, Italy, Spain, and other faltering economies. Global equities and commodities fell while the dollar pared its losses on safe-haven inflows following reports of the lawsuit. Silver declined 1.1% while sister metals platinum and palladium lost 0.5% and 1.3%, respectively.

At the close: December gold slipped $10.20 to $1,612.60; September silver delined 30 cents, to $27.77; October platinum dropped $7.10 to $1,392.80; and September palladium lost $7.50 to $574.70 an ounce.

Today's return to risk aversion was further propelled by some soft U.S. economic forecasts. The Philadelphia Fed's third quarter survey of 48 forecasters show economists projecting GDP to grow at just 1.6%, a serious reduction from May's projection of 2.2%, and the jobless rate to remain stuck at 8.2% for the remainder of 2012. New forecasts from Goldman Sachs are slightly more optimistic. The banking behemoth sees GDP growing by 2.1% on average for the remainder of 2012 before slipping to 1.5% in the first quarter of next year. Goldman remains bullish on gold, projecting prices of $1,785 in three months, $1,840 in six months, and $1,940 in twelve months.