Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gold edged less than 0.1% lower to close under $1,269 as U.S. stocks climbed to record levels, reducing demand for alternative assets.

The Dow and S&P 500 each gained almost 0.5%, closing at record levels after tech shares rebounded for two days of losses. With the Fed meeting on monetary policy today, traders speculated that the central bank will be cautious with rates hikes to make sure not to stifle growth with too much tightening.

The Fed has recently acknowledged softer inflation pressures and only moderate recovery from the first quarter's anemic growth. Several prominent members have signaled a desire to reconsider the pace future hikes after June's near-certain quarter-point rise.

The Producer Price Index for May was flat, showing a 0.3% increase in final demand services offsetting a 0.5% decrease in final demand products. Moderating inflation reduces the urgency for future rate hikes.

The dollar dipped slightly against a basket of rivals as the UK pound jumped on strong inflation data.

The other precious metals also finished lower, with silver dropping 1% while platinum and palladium fell 2.2% and 0.8%, respectively.

At the Comex close: August gold dipped 30 cents to $1,268.60; July silver lost 18 cents to $16.77; July platinum dropped $20.30 to $924.20; and September palladium gave up $6.70, to $857.55 an ounce.