Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gold edged slightly higher, adding 10 cents to close at $1,264.70, as the dollar flattened after Friday's uptick behind solid payrolls data. Dovish comments on interest rates from a pair of Fed members also underpinned gold prices despite falling oil prices and rising equities.

The dollar wobbled between mild gains and losses, pressured by a strengthening euro as traders speculated that the ECB may begin to taper quantities easing in the coming months. The shared currency has now gained 12% against the dollar this year.

The buck had bounced off 15-month lows last week, hammering gold, after Friday's report that U.S. nonfarm payrolls added 209,000 jobs in July, which pushed unemployment down to a 16-year low of 4.3%. Traders saw the improved job numbers as potentially supporting another rate increase from the Fed this year. Higher rates pressure gold by boosting the dollar, making dollar-denominated commodities more expensive to users of other currencies.

A pair of prominent Fed members pushed back against the need for another rate hike, however. Separately, Neal Kashkari of the Minneapolis Fed and Fred Bullard of the St. Louis Fed said today that the jobs report does nothing to strengthen the need for higher rates, and that current the levels are appropriate until inflation rises above the Fed's target 2%.

Capping gold's gains, the Dow inched higher toward its ninth straight record close, boosted by solid earnings and the upbeat jobs report. And oil prices fell 0.5% as output rose in Libya's largest oil fields. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were mostly higher, with silver slipping 0.1% while platinum and palladium rose 0.3% and 1.2%, respectively.

At the Comex close: December gold added 10 cents, to $1,264.70; September silver dipped a cent to $16.25; October platinum picked up $2.60 to $971.60; and September palladium gained $10.40 to $885.20 an ounce.