Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold slipped 0.4%, closing just under $1,133, as profit-taking from last week's 3.1% rally combined with a stronger dollar to reduce demand for alternative assets.

The dollar gained 0.7% against major rivals after statements by central bankers on both sides of the Atlantic raised expectations that the Fed, despite having held rates near zero at last week's meeting, remains on course to tighten monetary policy while the other major central banks ease further

Peter Praet, chief economist at the ECB, told the press that he and his colleagues are ready to expand quantitative easing in order to combat deflation and spur growth in the Eurozone. His comments echoed those made by ECB President Mario Draghi earlier this month. China sent shockwaves through financial markets last month by devaluing the yuan, and Japan has been deeply into QE for years.

Several Fed officials, including moderates John Williams of San Francisco and Dennis Lockhart of Atlanta, have stated in recent days that a hike is still likely this year. The CME FedWatch tool shows the market pricing in the odds of a hike in December at 44% and January at 55%. Higher rates strengthen the dollar by attracting capital, and a stronger dollar weighs on gold and other commodities by making them more expensive overseas.

The other precious metals were mixed, with silver and palladium adding 0.4% and 0.9% while platinum lost 1.1%.

At the Comex close: December gold slipped $5 to $1,132.80; December silver added 6 cents, to $15.221; October platinum dropped $10.70 to $973.70; and December palladium gained $5.25 to $616.10 an ounce.