Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold dipped 0.1% to close just under $1,279 as expectations of quantitative easing in the Eurozone bolstered the dollar and equities, reducing demand for alternative investments.

Speaking at the Jackson Hole conference of central bankers on Friday, ECB president Mario Draghi unexpectedly said that a program of Fed-style bond purchases is becoming more likely in Europe. Stubbornly low prices and weak economic growth are undermining confidence and raising fears of a Japan-like deflationary spiral. Tantamount to printing money, QE increases inflationary pressure through currency devaluation.

The dollar rose to an 11-month while the euro dropped near one-year low in the wake of Draghi's speech. Global equities rallied on the expectation of greater easing, with the S&P 500 surpassing 2,000 for the first time in intraday trade. A rising dollar typically weighs on precious metals and other commodities denominated in it for international trade by making them more expensive to holders of other currencies.

The other metals were mixed, with silver dropping 0.2% while platinum finished virtually flat. Palladium was the outlier, adding 0.2% of prospects for rising auto manufacturing, as its primary industrial use is in automotive catalytic converters.

At the Comex close: December gold slipped $1.30 to $1,278.90; September silver slid 3 cents to end at $19.36; October platinum dropped one cent to $1,418.40; September palladium added $2.15, to $889.75 an ounce.