Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold jumped almost 2%, closing above $1,225 to open the New Year, as bargain-hunters took advantage of oversold prices after the metal's 28% loss in 2013, its first down year since 2000. The Dow tumbled 135 points and the Global Dow fell 1% as traders shifted profits away from equities. The dollar rose against most major rivals, making gold's daily gain all the more impressive. A rising dollar typically weighs on demand for gold and other commodities denominated in dollars internationally by making them more expensive to holders of other currencies. Silver leapt almost 4% while platinum and palladium added 2.2% and 1.7%, respectively.

At the Comex close: February gold surged $22.90 to $1,225.20; March silver leapt 76 cents to $20.13; April platinum gained $30.80 to $1,404.60; and March palladium climbed $11.95 to $730.25 an ounce.

Gold was further supported today by strong physical demand in Asia and the Middle East. Premiums in China rose to $23 an ounce today, nearly 30% higher than in December and 22% higher than the average premium for all of 2013. China was the world's largest gold consumer last year, buying just less than 800 metric tons through the first three quarters, followed by India at 715 tons. Chinese demand is expected to be strong in January because of the lunar New Year, and the overall Asian buying trend is expected to build throughout 2014, helping to put a floor under gold prices.

Gold imports to Turkey rose to their highest level since July last month. Turkey imported more 203 tons last year, the most since 1995 and more than twice the 2012 total. Silver imports skied to more than 41 tons last month, the biggest monthly total since 1999, on bargain-hunting.

The U.S. Mint reported selling 14% more American Gold Eagle bullion coins in 2013 than in 2012, and Australia's Perth Mint increased gold bullion sales by 41%.