Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold surged 2.6% to a two-week high and the dollar traded sharply lower after Ben Bernanke reassured investors that monetary stimulus will remain in place for a long time to come. Speaking at an economic conference a few hours after yesterday's release of FOMC minutes, the Fed Chair said �highly accommodative monetary policy for the foreseeable future is what�s needed in the U.S. economy." Bernanke also asserted that the FOMC is likely to hold interest rates near zero even after unemployment drops below 6.5% because the jobless rate may understate persistent weakness in the job market.

Building on statements in the Fed minutes that many members wish to see stronger employment before diminishing stimulus, Bernanke's unmistakably dovish comments slammed the dollar, which had been rallying in recent weeks on assumptions that quantitative easing would soon be tapered. QE has rallied gold and equities, and pressured the dollar, by flooding the economy with cheap and easy liquidity. The news propelled the Dow and S&P 500 to record-high closings, while gold rose for the fourth straight session, logging gains of more than 5.6% this week. Silver added 4.1% today and platinum and palladium rose by 2.9% and 0.6%, respectively.

At the Comex close: August gold surged $32.50 to $1,279.90; September silver gained 79 cents to $19.96; October platinum for picked up $39.50 to $1,407.60; and September palladium added $4.40, to $718.20 an ounce.