Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold dipped 0.3% to end its three-session winning streak as the market awaits word from the Fed on a new round of quantitative easing. This week's FOMC meeting is almost unanimously expected to bring an additional $45 billion in monthly bond buys, already dubbed QE4, in addition to the $40 billion in mortgage-backed securities being purchased through QE3. Targeting unemployment, the expansion would be exceedingly bullish for gold because it would further weaken the dollar and increase the risk of long-term inflation. Still, big traders were hedging their positions today in case the Fed disappoints, which it has a history of doing. The dollar fell in expectation of QE4 and the stock markets rallied, with the S&P adding more than 0.6% and the NASDAQ almost 1.2%. Silver and palladium both slipped 1.1% while platinum picked up 1%.

At the Comex close: February gold dipped $4.80 to $1,709.60; March silver dropped 36 cents to $33.02; January platinum picked up $16.70 to $1,640; and March palladium fell $7.95 to $696.80 an ounce.

Despite the day's tepid futures trading, demand for physical bullion continues its strong rise. Holdings in gold-backed ETFs reached another new record at nearly 2,630 tonnes yesterday, according to Bloomberg. Gold premiums rose in Hong Kong because of strong demand for physical bullion in China, reaching their highest level in five months, according to Reuters.