Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold slipped another 0.3%, closing just above $1,281, on concerns that last Friday's strong non-farm payroll report may prompt the Fed to roll back monetary stimulus earlier than expected. Whereas most economists still look for an April taper on quantitative easing, the Fed�s $85 billion-per-month bond-buying program, traders are hedging their bets for the possibility of December or January. The dollar rose against most rivals, weighing on gold and other commodities denominated in dollars internationally by making them more expensive to holders of other currencies.

Gold was further pressured by rising risk-appetite as investors poured money into equities, pushing the Dow to its 35th record close this year. The other precious metals tracked gold lower, with silver dipping 0.2% while platinum and palladium fell 0.7% and 0.4%, respectively.

Today's risk-rally was assisted by upbeat economic news from China, where industrial production and exports rose last month and auto sales grew the fastest pace in nine months. China�s recovery is expected to prove a boon to gold prices, with gold consumption forecast to rise nearly 30% this year, according to World Gold Council data. Chinese investment demand is exploding as its middle class expands and incomes rise, and the ripple-effects are being felt throughout Asia. Around 60% of global demand for gold coins, bars, and jewelry now comes from China, India, Indonesia, and Vietnam, up from 35% in 2004, according to HSBC Holdings.

At the Comex close: December gold slipped $3.50 to $1,281.10; December silver dipped four cents $21.28; January platinum fell $10.50 to $1,432.40; and December palladium dropped $3.35 to $754.55 an ounce.