Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold slipped 0.4% as most traders remained on the sidelines awaiting tomorrow's FOMC statement. Central bankers meet today and tomorrow to discuss, among other things, the near-term fate of quantitative easing. While no changes in the bond-buying program are expected until September at the earliest, the Fed's post-meeting policy release will be scoured nonetheless for hints on when and at what pace they may come. QE supports higher gold prices because it devalues the dollar and increases the risk of long-term inflation. Gold has gained more than 8% in July, its biggest monthly increase since January 2012, in part because Fed Chair Ben Bernanke told Congress that it is "far too early" to decide whether to begin tapering QE in September.

Gold initially fell $12 before rebounding to close at $1,324 on the release of some tepid U.S. economic data. Consumer confidence declined unexpectedly in July, as shoppers felt less optimistic about the strength of the labor market. Home prices rose more slowly in May, missing forecasts and suggesting that rising mortgage rates are starting to take a toll. Long-term interest rates have risen over the last two months as the market braces for the withdrawal of monetary stimulus. The dollar and U.S. equities crept slightly higher, pulling sentiment from gold, while the other precious metals also finished lower. Silver and platinum both dropped 0.6% while palladium shed 1.8%.

At the Comex close: December gold slipped $5.60 to $1,324; September silver dropped 12 cents to $19.75; October platinum lost $8.90 to $1,433.80; and September palladium shed $13.15 to $731.50 an ounce.