Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold rose 0.7% to its highest close this week as softer macroeconomic data and bargain-hunting in the physical market boosted demand. The Conference Board's leading economic indicators declined last month after three months of gains. The Philadelphia Fed region's economic index fell to 1.3, barely above contraction, as manufacturing slumped. And U.S. jobless claims rose for the third week out of the past four in a sign that employment healing has slowed. Equities fell and the dollar rolled back, supporting higher gold prices. The other precious metals were mixed. Silver and platinum slipped 0.3% and 0.5%, respectively, while palladium added 1.3%

At the Comex close: June gold rose 0.7% to $1,392.50; May silver slipped 6 cents to $23.245; July platinum lost $6.40 to $1,429; and June palladium added $8.40, to $669.80 an ounce.

Demand for physical gold is rebounding in the wake of the recent sell-off, especially in the crucial Asian markets. Bloomberg reports that retail bullion sales in China soared this week and jewelry demand for gold in India climbed to its highest level this year. The U.S. Mint has sold more than 170,000 ounces of Gold Eagle and Gold Buffalo coins so far in April, nearly three times the total for all of March. Anecdotally, bullion dealers across the U.S. are reporting their strongest sales in years as the markets for physical and paper gold continue to diverge.

Economists are increasingly concerned that Europe is edging toward a full-fledged depression. Unemployment is at record highs; credit is disappearing; banks are failing; and GDP has contracted for the sixth consecutive quarter. To stop the downward spiral, IMF Director Christine Lagarde today called for deeper easing from the ECB, praising the Bank of Japan's recent commitment to $1.4 trillion in additional quantitative easing over the next two year. Expanding monetary bases in the eurozone and Japan support higher long-term gold prices because they devalue currencies and build demand for alternative stores of value.