Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold slipped another 0.8% as expectations that the Fed will reduce quantitative easing later this year boosted the dollar and decreased the metal's safe-haven appeal. After surging nearly 5% in one day last week because of the FOMC's surprise decision to maintain monetary stimulus at current levels, gold has skidded nearly 4% in the past three sessions as the euphoria fades and traders confront the reality once again that a taper is coming. St. Louis Fed President James Bullard said last Friday that it may arrive as early as next month, data permitting. QE has supported higher gold prices by devaluing the dollar and increasing the risk of long-term inflation.

The dollar rallied against most major rivals despite reports that U.S. consumer confidence fell to a four-month low in September. The buck was supported by a falling euro after ECB President Mario Draghi declared that he is ready to increase liquidity to eurozone banks in order to safeguard the region's recovery, which undermined the euro. A rising dollar pressures gold because it is denominated in dollars internationally and becomes less expensive to holders of other currencies. The Dow, which has been helped to record highs by quantitative easing, slid for the third straight session. Silver dropped 1.2% and platinum finished flat while palladium added 0.3%.

At the Comex close: December gold slipped $10.70 to $1,316.30; December silver dropped 27 cents to $21.59; October platinum stayed at $1,425.90; and December palladium added $2.05, to $720 an ounce.