Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold edged up 0.1% to close just under $1,315 after several Fed officials stated that the FOMC is in no hurry to scale back monetary stimulus. Saint Louis Fed President James Bullard said today that low inflation allows the Fed to be patient with quantitative easing, the program of buying $85 billion per month in long-term bonds. With inflation at merely 1.2%, there is "no threat" of 1970s-style inflation on the horizon, he said, and the Fed still has plenty of room on its balance sheet. QE supports higher gold prices by devaluing the dollar and increasing long-term inflation risk.

Separately, Eric Rosen of the Boston Fed echoed Bullard's comments, saying a taper in April rather than December would make little difference to the Fed's balance sheet yet would allow the central bankers to wait for "evidence of a more sustainable recovery." And Fed Board Governor Jerome Powell said the timing of the taper is "necessarily uncertain" and there's no need to rush it.

Gold came under selling pressure and the dollar rallied last week after the Fed hinted that a December taper was still on the table. Today's comments appear to walk back that suggestion, pushing the dollar lower and supporting higher gold. The other metals were mixed, with silver slipping 0.6% while platinum and palladium gained 0.3% and 1.5%, respectively, on rising car sales. Both PMGs are used in automotive catalytic converters.

At the Comex close: December gold edged up $1.50 to $1,314.70; December silver slipped 14 cents to $21.70; January platinum added $4.30, to $1,456.20; and December palladium jumped $11.25 to $749.50 an ounce.