Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.6% to close near $1,318 as the dollar retreated ahead of meetings by the Fed and Bank of Japan this week.

The dollar dropped around 0.3% against major rivals, especially the yen, as traders positioned themselves for the growing likelihood that the BOJ will refrain from adding more quantitative easing. With growth and inflation remaining stubbornly low despite multiple rounds of easing, currency markets had widely anticipated more easing from the BOJ at its next meeting.

Officials are now signaling a less aggressive tack emphasizing negative interest rates instead of additional easing. The news boosted the yen against the dollar as QE typically weakens a currency against its rivals. Also pressuring the buck, the Fed is widely expected to keep interest rates unchanged when the it meets this week.

Oil traded higher, gaining around 0.5%, after Venezuela said OPEC and other producers are likely to sign a deal to stabilize prices. Gold trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals also gained, with silver jumping 2.3% while platinum and palladium added 0.6% and 2.1%, respectively.

At the Comex close: December gold gained $7.60 to $1,317.80; December silver jumped 43 cents to $19.29; October picked up $6.10 to $1,023.70; and December palladium rose $13.85 to $686.25 an ounce.