Daily Gold Update

Source: Dana Samuelson, American Gold Exchange

American Gold Exchange— Precious metals tumbled in overnight and early morning trading Thursday, stair stepping lower, as sell stops were triggered, erasing gains made Monday and Tuesday. Upward momentum driven by the short-covering rally that began Monday stalled Wednesday as traders digested news of the tentative U.S. budget agreement. Absent follow through buying overnight and with next weeks Fed meeting and the possible announcement of their long anticipated taper looming larger, precious metals ebbed lower through short-term support levels early Thursday, triggering sell stops. By the time the New York Comex session opened the damage was mostly done and precious metals settled back into trading ranges that were established at the end of last week.

Once gold fell below short-term support at $1,250 it stair stepped lower in $10 increments until it found support at $1,225, exactly where it found support at the end of last week. Silver traded lower in similar fashion, stair stepping down in 20 to 25 cent increments from short-term support at $20.20, until it found support at $19.40 where it enjoyed support late last week as well. Platinum and palladium followed gold and silver lower.

The U.S. Dept. of Commerce reported today that retail sales increased 0.7% in November. This is the biggest monthly increase since June and markets viewed this as another sign that the U.S. economy is continuing to slowly improve. This news helped to bolster the dollar and anticipation of a possible Fed taper next week. The U.S. dollar index, which measures the value of the dollar against a basket of foreign currencies, rallied from Wednesday�s five week low of 79.87 to as high as 80.37 Thursday.

At the Comex close: February gold fell 2.6% or $32.30 to $1,224.90; March silver fell 4.4% or 90 cents to $19.46; January platinum fell 1.5% $20.80 to $1,364.40; and March palladium fell 2.5% or $18.20, to $720.25 an ounce.