Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold dipped 0.2% to close under $1,342 as traders took profits from a four-session winning streak. The metal finished the week 2.4% higher, boosted by the Fed's decision to hold interest rates steady at the September meeting of the FOMC, which concluded on Wednesday.

A recent spate of weak data, including August job growth, manufacturing, and wholesale inflation, undercut the case for higher rates. Although Fed Chair Janet Yellen signaled that a rate hike is likely by the end of the year, she cautioned that the committee needs to see continued progress in economic growth, payroll expansion, and inflation before committing to tighter monetary policies

Despite Yellen's hawkish forward guidance, the case for a December hike is not all that strong, with traders placing the odds at a little better than 50/50, according CME FewWatch.

The Markit Flash PMI for September, released today, shows manufacturing expanded at the slowest pace in three months and barely more than contraction. The New York Fed cut its growth forecast for U.S. GDP to 2.26% in Q3 and 1.22% in Q4.

The dollar rebounded 0.2% on bargain-hunting after several days of losses, pressuring gold and other commodities denominated in it for international trade. Oil plunged around 4% on reports that disagreements between Iran and Saudi Arabia may stop an expected pact among major oil producers to reduce over-production and boost prices. Gold often trades in sympathy with oil as a hedge against energy-inflation.

The other precious metals were mixed on the day but strongly higher for the week. Silver dropped 1.4% but still gained 5% this week. Platinum slid 0.5% but held a weekly gain of 4.5%. Outlier palladium gained 0.9% today and around 5% this week.

At the Comex close: December gold dipped $3 to $1,341.70; December silver dropped 29 cents to $19.81; January platinum slid $5.60 to $1,060.90; and December palladium gained $5.95 to $706.40 an ounce.