Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold dipped 0.2% to close below $1,269 but then rebounded to $1,274 after hours as the dollar slipped against most major rivals. The Bank of England signaled that it may raise interest rates sooner than expected because of falling unemployment, boosting the pound against the dollar. The euro swung wildly behind mixed messages from ECB officials, first falling sharply on suggestions that more monetary stimulus may be forthcoming, then bouncing higher again when that message was contradicted.

Traders hedged their dollar bets ahead of Janet Yellen's discussion of monetary policy before the Senate Banking Committee tomorrow. Nominated to succeed Ben Bernanke as Fed Chair, Yellen is widely seen as disinclined to taper quantitative easing, the Fed's $85 billion-per-month bond-buying program intended to drive growth and lower unemployment. QE supports higher gold and equities prices by flooding the markets with liquidity, devaluing the dollar, and increasing the risk of long-term inflation.

The Dow and S&P 500 pushed to new record-closes, in part on speculation that Yellen will advocate for prolonged stimulus, whereas the other precious metals outpaced gold's lower close, with silver falling 1.6%, platinum down 0.5%, and palladium 0.9% lower.

At the Comex close: December gold dipped $2.80 to $1,268.40; December silver gave up 34 cents to $20.44; January platinum fell $7.60 to $1,432; and December palladium lost $6.90 to $735.45 an ounce.