Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold initially closed down 0.1% but then gained 0.2% in electronic trading as investors sought safety from the deepening eurozone crisis and another round of poor U.S. economic data. S&P downgraded eleven of Spain�s largest banks while Spanish GDP contracted in the first quarter, putting the region�s fourth-largest economy into recession for the second time in three years. Finance ministers are again considering the creation of a so-called "bad bank" in Spain like the one created in Ireland just before its bailout, in order to segregate the bad loans that are undermining its banking system. The crisis is so dire that weak banks are likely to require 100 billion euros in recapitalization.

Closer to home, ">U.S. consumer spending weakened in March, tracking a general slowdown in the U.S. economy. Manufacturing in the Chicago and Dallas areas dropped sharply, with the Chicago PMI posting its weakest mark in 29 months and the Dallas Fed regional index at its lowest in eleven months. The dollar gained on safe haven inflows, which weighed initially on the gold price, while commodities and equities closed lower. Gold's resilience on a day of risk-off trading against a rising dollar is noteworthy, and shows its continuing safe-haven appeal. Silver dropped 1.3% and platinum 0.2% while palladium bucked the trend by nudging up 0.1%

At the close: June gold slipped 60 cents to $1,664.20; May silver fell 40 cents to $31.02; July platinum lost $3.80 to $1,571.90; and June palladium rose 85 cents to $682.35 an ounce.