Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold surged more than 1.6%, closing at a two-week high near $1,226, as follow-through from yesterday's dovish Fed minutes combined with a sell-off in equities to spur safe-haven buying.

Most of gold's gains came after hours yesterday when it jumped from $1,206 to $1,220 immediately following the release of the minutes from the September FOMC meeting, in which the central bankers voiced growing concerns that the recent strength of the dollar and weakness in global growth could undermine the U.S. recovery. The metal added another $6 an ounce today on momentum buying.

Traders took Fed's the message to be that it's willing to wait longer before raising interest rates. Higher rates would strengthen the dollar against other currencies, pressuring precious metals and other commodities denominated in it for international trade by making them more expensive overseas.

Equities tumbled, giving up yesterday's gains on concerns about global growth. Germany's exports plunged by the most since 2009, underscoring weakness in the Eurozone's biggest, strongest economy. ECB chief Mario Draghi alarmed investors by stating that Europe's persistent economic malaise in structural, not cyclical, and may only be remedied by difficult reforms. The Dow lost more than 335 points, or 2%; the S&P 500 fell 2.1%; and the Global Dow gave up more than 1.1%.

The other precious metals rose, with silver leading the way by closing 2.1% higher. Platinum and palladium added 1% and almost 0.4%, respectively.

At the Comex close: December gold surged $18.70 to $1,225.70; December silver jumped 36 cents to $17.42; October platinum picked up $12.40 to $1,278.50; and December palladium added $2.80 to $799.25 an ounce.