Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold surged 1.3% to close at $1,207, nearly a two-week high, as turmoil in the Eurozone over Italy's fiscal strategy triggered safe-haven demand.

The European Commission warned today that Italy's plan to expand its budget deficit to 2.4% of GDP would result in a Greek-style financial crisis. The anti-establishment Italian government has rejected EU strictures on limiting its deficit to less than 1% as too austere. The economic spokesman for Italy's ruling League party further shook markets by saying Italy's fiscal problems would be solved by leaving the euro.

European stocks and the euro fell on the growing conflict between the EU and its third-largest economy. The dollar benefited from flights to safety, rising around 0.2%, but gold received the strongest safe-haven interest. Hedge funds and other large speculators with bets on softer gold were forced to cover their short positions, driving prices sharply higher.

The other precious metals were mostly higher, with silver and platinum rising 1.3% and 0.7%, respectively, while palladium slid 0.5%.

At the Comex close: December gold surged $15.30 to $1,207; December silver climbed 19 cents to $14.69; January platinum added $5.60, to $833.50; and December palladium slid $5.70 to $1.050.70 an ounce.