Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold slipped 0.3% to close under $1,288 and then dipped another $3 in electronic trade after the Fed's new policy statement, released this afternoon, left the door open for higher interest rates later this year.

As expected, the Fed's statement repeated recent optimism about improvements in U.S. labor markets, economic growth, and prospects for inflation rising to the 2% target. The central bankers looked past turmoil in currency markets, slowing global growth, softer U.S. data, and deflationary pressure in Europe and Asia. They reiterated their willingness to be "patient," which most analysts took to mean no rate hikes before June.

The dollar edged up before the statement, fluctuated, and then held its gains as traders clung to the absence of any dovish changes in the Fed viewpoint on rates. Gold slid around $3 in electronic trade following the release.

The dollar was also supported by Singapore's unexpected easing, which pushed its dollar to a four-year low in an effort to keep pace with recent monetary easing by the ECB, Denmark, India, and Canada. A stronger dollar weighs on gold and other commodities by making them more expensive to international buyers.

The other precious metals were mixed. Silver tracked lower with gold, dropping 0.4%, while platinum finished virtually flat and palladium picked up 0.8%.

The Comex close: February gold slipped $4 to $1,287.70; March silver dropped 7 cents to $18.01; April platinum inched up 20 cents to $1,264.50; and March palladium gained $6.60 to $787.35 an ounce.