Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold surged 1.2% to close at a 13-month high near $1,273 after ECB chief Mario Draghi declared the end of rate cuts in the Eurozone, rallying the euro and causing a sell-off in the dollar and equities.

The European Central bank delivered an aggressive round of stimulus measures today, boosting quantitative easing by 20 billion euros per month and cutting deposit rates more deeply into negative territory. In response, the euro declined against the dollar early in the trading session while equities rose and gold slid to an intraday low of $1,238.

However, the markets abruptly reverse themselves after Draghi undercut the new easing policies by stating that further cuts in interest rates were unlikely to occur. The surprising declaration boosted the euro to a six-week high, drove the dollar 1.3% lower against major rivals, and pressured U.S. and global equities to swing from gains into losses.

Gold rallied by more than $30 an ounce after Draghi's bombshell, as traders rejected risk and the dollar in favor of alternative assets. A weaker dollar supports higher prices for gold and other commodities by making them less expensive overseas.

The other precious metals were also higher, with silver matching gold's 1.2% gain while platinum and palladium added 0.8% and 1.3%, respectively.

At the Comex close: April gold surged $15.40 to $1,272.80; May silver jumped 18 cents to $15.55; April platinum picked up $7.90, to $990.70; and June palladium gained $7.45 to $573.60 an ounce.