Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gold surged 1.3% to close at a week high above $1,211 as the dollar tumbled and stocks retreated, boosting demand for alternative assets. The metal gained 5.2% in January for its best month since June.

The dollar fell 0.9% to a seven-week low against major rivals, after comments by Donald Trump and one of his chief economic advisors suggested a preference for a weaker dollar.

Peter Navarro, head of Trump's National Trade Council, said today the euro is "grossly undervalued" and it gives Germany an advantage over the U.S. in exports. Separately, Trump said drug companies are outsourcing production because of currency devaluation in other countries.

The comments come just two weeks after Trump proclaimed that the dollar is "too strong" and "it�s killing us" in trade, especially in competing with China. The dollar promptly fell from a 14-year high after that statement and has not recovered, losing 2.6% for the month. A falling dollar boosts gold and other commodities denominated in it for international trade by making them less expensive overseas.

Gold also received support from safe-haven bids as consumer sentiment softened and the Dow fell 0.6% on weak earnings, along with growing uncertainty over Trump's policies since taking office. After rallying strongly in the aftermath of the election, the Dow lost 1% in January.

Treasury yields also slipped and prices rose on flights to safety and expectations that the Fed will leave interest rates unchanged at this month's meeting, which commenced today.

The other precious metals also gained for the day and month. Silver jumped 2.3% today for a monthly gain of 9.7%. Platinum and palladium picked up 0.3% and 2.2% today, respectively, and each posted a 10% monthly rise.

At the Comex close: April gold jumped $15.40 to $1,211.40; March silver surged 39 cents to $17.54; April platinum added $3, to $996.50; and March palladium picked up $15.85 to $754.30 an ounce.