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Daily Gold Update
Current precious metals news

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Daily Gold Update presents a recap on today's action in the precious metals markets. View archives.


December 16: Gold loses 1.1% in volatile trade

Source: Bill Musgrave, American Gold Exchange

Austin -- Gold fell 1.1% to close below $1,195 in a day of volatile trade. After rising to $1,213 early in the session on safe-haven buying in response to Russia's panicked attempt to support the ruble, the metal then slipped as low as $1,188 as falling oil prices reduced its allure as an alternative store of value.

Russia's central bank hiked interest rates to 17% from 10.5% in a dramatic effort to support the plummeting ruble. The surprise decision succeeded only in panicking the Russian financial markets, knocking the currency further into freefall with a 19% loss today. The ruble has tumbled 52% this year as plunging oil prices and sanctions by the West have taken their toll.

Gold was pressured by speculation that Russia's financial desperation might cause it to sell a portion of its gold reserves to raise the hard currency required to support the ruble. Russia has been a consistent gold buyer in recent years, tripling its gold holdings since 2005 to more than 1,185 tonnes, the fifth-most of any nation.

After staging a brief rebound, oil resumed its slide as subpar manufacturing data in China and the U.S. diminished prospects for demand. Falling oil prices tend to weigh on gold because of the latter's widespread use as a hedge against inflation.

China's flash PMI showed contracting factory activity last month for the first time since May, adding to expectations that deeper easing will be needed in the world's second largest economy. U.S. manufacturing is expanding in December at its slowest pace in eleven months, according to Markit, suggesting a weaker fourth quarter GDP.

The other precious metals also finished lower, with silver plunging nearly 5% while platinum and palladium shed 1.5% and 2.3%, respectively.

At the Comex close: February gold fell $13.40 to $1,194.30; March silver dumped 81 cents to $15.75; January platinum lost $18.40 to $1,196.50; and March palladium shed $18.55 to $784 an ounce.




December 15: Gold falls 1.2% on Fed speculation

Source: Bill Musgrave, American Gold Exchange

Austin -- Gold fell 1.2% to close just under $1,208 as a stronger dollar and weaker oil reduced demand for the metal as an alternative store of value.

The dollar firmed against most major rivals after upbeat U.S. manufacturing in November increased speculation that the Fed will amend its forward guidance on interest rates when it meets this week. For months, the FOMC has pledged to keep rates near zero "for a considerable time" after quantitative easing concluded in October, a phrase generally interpreted to mean no increases until mid-2015.

Growing momentum in the economy, however, is leading traders to think a change may be afoot in the next policy statement, expected on Wednesday, suggesting the possibility of a sooner rate increase. Rising rates will support a stronger dollar, which would weigh on gold and other commodities denominated in it for international trade by making them more expensive to users of other currencies.

Crude oil fell to nearly $60 a barrel, compounding last week's 10% plunge, after OPEC said it will not cut production to boost prices. Falling oil typically signals lower expectations for inflation, pressuring gold because it is widely used as an inflation hedge.

Hedge funds are at their most bullish on gold since August, raising net-long positions for the fourth straight week, the longest stretch since last August, as tumbling U.S. and global equity markets are causing flights to safety.

The other precious metals tracked gold lower. Silver dropped 3.2% while platinum and palladium lost 1.3% and 1.7%, respectively.

At the Comex close: February gold fell $14.80 to $1,207.70; February silver dropped 56 cents to $16.50; January platinum lost $16.30 to $1,215.20; and March palladium shed $14.55 to $802 an ounce.




December 12: Gold scores 2.6% weekly rise

Source: Bill Musgrave, American Gold Exchange

Austin -- Gold edged slightly lower on profit-taking, holding above $1,224 and finishing the week 2.6% higher as investors sought safety from slowing global growth and plunging equities. It was the metal's biggest weekly rise in more than two months.

China's economy weakened in November, with demand, factory output, and business investment all slowing. The PBOC injected 400 billion yuan into the economy this week and is expected to add more monetary stimulus in the near future to drive faster growth.

Eurozone industrial output rose by a scant 0.1% in October, with production declining in France, Spain, and Italy while stagnating in Germany, the region's largest economy. The data underscored ECB Chief Mario Draghi's recent statement that downside risks remain in the Eurozone economy, further raising expectations that the central bank will launch Fed-style quantitative easing early next year.

Driven by the biggest drop in energy prices in a year, U.S. wholesale prices fell in November by more than forecast. Producer inflation was merely 1.4% year-over-year, the lowest since last February and well-under Fed targets. Soft inflation reduces pressure on the central bank to raise interest rates, lending support to gold by weighing on the dollar.

U.S. and global equity indexes sold off as tumbling oil prices and falling inflation undercut risk appetite despite reports that U.S. consumer sentiment rose in December to an eight-year high, largely because of plunging gasoline prices. Oil dropped another 4% today; the Dow lost 1.8%, and the Global Dow dumped 1.5%. European equity indexes tumbled to their biggest weekly losses in three years.

The other precious metals also slipped on the day but gained on the week. Silver dipped 0.1% for a 5.1% weekly jump. Platinum gave up 0.5% but gained 1.4% this week. Palladium surrendered 0.4% today but still rose 1.8% since last Friday.

At the Comex close: February gold dipped $1.50 to $1,224.10; March silver dropped 2 cents to $17.09; January platinum lost $5.60 to $1,236.50; and March palladium gave up $2.85, to $816.75 an ounce.




December 11: Gold drops 0.9% on strong retail sales

Source: Bill Musgrave, American Gold Exchange

Austiin -- Gold dropped 0.9% to close at $1,218 after stronger-than-expected U.S. retail sales boosted the dollar and reduced demand for alternative stores of value.

Consumer spending on retail items rose 0.7% in November, the most in eight months, lifting forecasts for economic growth in the fourth quarter. The data was somewhat surprising after retail spending over Thanksgiving weekend, which typically signals the start of holiday shopping, came in substantially slower than expected. Retail sales are an important component in overall consumer spending, which comprises around 70% of the economy. Among economists polled by Marketwatch, average GDP growth estimates rose for Q4 to 2.2% from 1.9% as a result of the report.

After three days of declines, the dollar rose on speculation that upbeat retailing data will encourage the Fed to revise its forward guidance on raising interest rates when it meets next week. A stronger dollar weighs on gold and other commodities denominated in it for international trade by making them more expensive to users of other currencies.

The dollar was also supported by reports that the ECB is falling short in efforts to expand its balance sheet by a trillion euros via its current asset-buying programs, increasing the likelihood that full-scale quantitative easing is coming early next year to help boost inflation. Tantamount to printing money, QE will devalue the euro and, by extension, help the dollar. It is also expected to build demand for gold as a currency hedge in the Eurozone.

The other precious metals tracked lower with gold. Silver fell 1% while platinum and palladium slid 0.8% and 0.4%, respectively.

At the Comex close: February gold dropped $11.40 to $1,218,00; March silver fell 17 cents to $17.02; January platinum slid $9.30 to $1,233.30; and March palladium slid lost $3.40 to $818.00 an ounce.




December 10: Precious metals mixed, oil lower

Source: Dana Samuelson, American Gold Exchange

Austin, TX -- Following yesterday’s sharp gains, precious metals were a mixed bag in New York trading today. Gold and platinum edged a bit lower while silver moved slightly higher. Palladium continued to add to yesterday’s gains. While metals were mostly sideways, today’s news was all about oil.

OPEC cut its oil demand forecast for 2015 down about 300,000 barrels a day, to 28.9 million per day, the lowest level in 12 years. The U.S. Energy Information Administration reported that oil inventories rose by about 1.5 million barrels in the week ending Dec. 5, analysts had expected a 3 million barrel decrease in supplies. And Saudi Arabia reiterated that they will keep pumping, despite declining demand and prices. When asked about potential production cuts by reporters while he was attending U.S. global warming talks in Lima, Peru., Saudi Arabian Oil Minister Ali Al-Naimi commented, “Why should I cut production?”

Brent crude tumbled almost 5% lower, to under $65 for the first time in 5 years. Energy shares sold off on the overwhelmingly bearish oil news, the S&P 500 declined 0.8% and the DJIA dropped over 150 points, or 0.9% as well.

At the Comex close: February gold declined $2.60 to $1,229.40; March silver gained 5 cents to $17.18; January platinum fell $4.20 to $1,242.60; and March palladium added another $9.80, to $821.40 an ounce.




December 9: Gold surges 3.1% on global risk aversion

Source: Bill Musgrave, American Gold Exchange

Austin -- Gold surged 3.1% to close at $1,232, its highest finish in six weeks, as changes to China's bond market and rising instability in Greece caused global investors to shun risk assets in favor of safe havens.

China tightened its lending policies to accept only AAA-rated bonds in repurchase agreements, the nation's clearinghouse for debt exchanges used by regional and provincial governments for financing infrastructure projects. The goal of the Chinese government is to curb the shadowy expansion of risky debt taking place on the local level. The change sparked an instantaneous liquidity crunch as lower-rated debt could no longer be used as collateral.

Asian equities quickly sold off, with the Shanghai Index plunging 5.4%, the most since 2009, while other regional indexes fell in sympathy. European equities quickly followed suit after Greek stocks tumbled 13%, the most in 27 years, on rising political instability. Prime Minister Samaras called for snap elections for a new head of state, jeopardizing the nation's ability to obtain financing to replace its onerous bailout program and causing bond yields to jump.

The yen spike higher on safe-haven inflows while the dollar fell from two-year highs, supporting precious metals and other commodities denominated in it for international trade. U.S. Treasuries also rallied alongside gold on flights to safety, while U.S. equities rolled back.

Gold was further supported, and the dollar pressured, by speculation that the Fed will refrain from raising interest rates until June 2015 or later. Prominent FOMC members John Williams of the San Francisco Fed and Dennis Lockhart of Atlanta said separately that forward guidance on rates should continue to keep them near-zero for "a considerable time."

The other precious metals were all higher, with silver leading the way by jumping 5.3%. Platinum and palladium added 1.4% and 1.7%, respectively.

At the Comex close: February gold for delivery surged $37.10 to $1,232; March silver jumped 86 cents to $17.13; January platinum gained $17.40 to $1,246.80; and March palladium added $13.80, to $811.60 an ounce.




December 8: Gold rallies on global easing view

Source: Bill Musgrave, American Gold Exchange

Austin -- Gold climbed 0.4%, closing just under $1,195, and then jumped to $1,204 in electronic trade as soft economic reports in Japan, China, and the Eurozone fueled expectations of deeper global easing, boosting demand for the metal as an alternative store of value.

Japan's economy contracted by 1.9% in the third quarter, more than forecast, on falling business investment and manufacturing. China's imports shrank and exports decreased unexpectedly in November, leading to projections of slower future growth. And the Organization for Economic Cooperation and Development reported today that the Eurozone is on the brink of falling back into contraction.

Central bankers are expected to respond with deeper monetary stimulus to boost economic activity and consumption. The Bank of Japan is already committed to unprecedented monetary easing to lift its economy out of long-term stagnation. The ECB has started purchasing asset-backed securities and private bonds, and is poised to begin Fed-style quantitative easing by buying government debt. Tantamount to printing money, these programs increase the risk of long-term inflation by flooding markets with liquidity, spurring demand for gold as a hedge against currency devaluation.

Hedge funds and large-scale money managers are becoming increasingly bullish on gold in light of deeper global easing. Net-long positions and options, which are essentially bets on higher gold prices, rose by 20% last week, the most since August. It was the third consecutive week of rising bullish positions, the longest stretch since July.

The other metals were mixed. Silver closed up 0.1% before spiking another 0.8% after hours. Platinum gained 0.8% and then added another 0.4%, while palladium slid 0.6% before recouping most of that loss in electronic trade.

At the Comex close: February gold climbed $4.50 to $1,194.90; March silver added 2 cents, to $16.27; January platinum gained $9.90 to $1,229.40; and March palladium slid $4.90 to $797.80 an ounce.




December 5: Gold slides 1.4% after strong jobs report

Source: Bill Musgrave, American Gold Exchange

Austin -- Gold slid 1.4% to close just over $1,190 after a surprisingly strong jobs report triggered speculation that the Fed may raise interest rates sooner than expected. Despite the pullback, gold finished the week 1.3% higher.

U.S. nonfarm payrolls added 321,000 jobs in November, the most in nearly three years and far more than forecast, while unemployment rate stayed unchanged at 5.8%. Wages rose by 0.4% in November after months of near-stagnation, suggesting that higher inflation may soon follow.

The dollar surged behind the jobs data as traders placed bets on higher U.S. interest rates. The ICE dollar Index, which measures the buck against a basket of major rivals, jumped more than 0.8% to its highest level in more than eight years. A rising dollar pressures god and other commodities denominated in it for international trade by making them more expensive to holders of other currencies.

Solid physical buying continues to support gold prices in Asia, the Middle East, and the U.S. Turkey's gold imports jumped to 46.9 tonnes last month, the most in six years, and its silver imports reached a 2014 high. Higher demand in China is elevating premiums on gold bullion. The U.S. Mint sold 60,000 ounces of Gold Eagles in November, 25% more than a year ago. Mint sales have averaged 62,000 ounces per month for the past three months—an 80% increase over the previous three months.

The other precious metals were mixed on the day and week. Silver surrendered 1.9% but finished the week with an impressive 4.4% gain. Platinum lost 2.1% today but added 0.7% this week. Palladium added around 0.1% today but lost 1.3% this week.

At the Comex close: February gold dropped $17.30 to $1,190.40; March silver surrendered 32 cents to $16.26; January platinum lost $26.40 to $1,219.50; and March palladium picked up 55 cents, to $802.70 an ounce.




December 4: Gold holds after jobless claims, ECB

Source: Bill Musgrave, American Gold Exchange

Austin -- Gold held nearly all of this week's 2.7% gain, dipping $1 to $1,207.70, after initial jobless claims rolled back and the European Central Bank left stimulus plans unchanged.

After climbing for most of November, first-time applications for unemployment benefits receded last week to 297,000 from 313,000 the previous week, lending hope for sustained momentum in the labor market. The improvement comes one day after a disappointing ADP report on private payrolls.

A strong reading in tomorrow's U.S. nonfarm payrolls report, the most widely anticipated monthly measure of employment, could create additional pressure on the Fed to raise interest rates. Higher rates are likely to weigh on the gold prices by strengthening the dollar.

Gold's losses were mitigated after the ECB pushed its decision about whether to undertake full-scale quantitative easing until its January meeting. The euro jumped and the dollar fell on the news, supporting commodities denominated in it for international trade.

The other metals finished higher, with silver adding 1% while platinum and palladium picked up 1.5% and 0.6%, respectively.

At the Comex close: February gold dipped $1 to $1,207.70; March silver jumped 16 cents to $16.58; January platinum gained $18.40 to $1,245.90; and March palladium picked up $4.60, to $802.15 an ounce.




December 3: Gold gains 0.8% with rising oil

Source: Bill Musgrave, American Gold Exchange

Austin -- Gold forged back above $1,200, gaining 0.8% to close near $1,209, as a rally in oil prices and disappointing jobs data boosted demand for the metal as a store of value.

Crude oil jumped 0.6% after an official report showed U.S. inventories have fallen more than expected. The small rebound prompted traders to buy gold as a hedge against the rising inflation that typically accompanies higher energy costs. Oil has declined around 36% this year because of rising U.S. shale oil production and a sharply higher dollar.

Gold was also supported by reports that private-sector hiring fell short of expectations. ADP said 208,000 jobs were added in November, whereas most analyst were forecasting around 230,000. The more important data from the U.S. non-farm payrolls report is due on Friday. The timing of the Fed's decision to raise interest rates will be largely contingent on the strength of the job market and signs of rising inflation, which remains below Fed targets.

The other metals were mixed, with silver slipping 0.3% and palladium dropping 0.8% while platinum added 0.8%

At the Comex close: February gold gained $9.30 to $1,208.70; March silver slipped 4 cents to $16.41; January platinum added $10, to to $1,227.50; and March palladium dropped $6.20 to $797.55 an ounce.




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