Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold edged down 0.2% to close just over $1,229 in thin trade as the markets await direction from this month's FOMC meeting, which begins tomorrow. Losses were limited by rising physical demand in Asia.

When the meeting concludes on Wednesday, the Fed is expected to announce the end of quantitative easing, the bond-buying program that has ballooned its balance sheet to around $4.5 trillion since 2008. Tantamount to printing money, QE has supported higher prices for gold and equities by flooding the markets with liquidity. The Fed is also expected to reassure the markets that interest rates will remain near zero for "a considerable time" after QE ends because of persistent weakness in the global economy and too-low inflation here at home.

China imported nearly 62 tons of gold from Hong Kong last month, the most since April, ahead of its National Day celebration. Demand is also rising in India, the world's second-largest gold buyer, in anticipation of the upcoming wedding season and Hindu Diwali festival. Indian trade organizations expect gold imports to jump 75% this quarter, supporting higher global gold prices.

The dollar slipped after pending home sales in September fell short of forecasts and, according to Markit, activity in the U.S. services sector fell to a six-month low in October. The dollar was also pressured by a rising euro after news that merely 25 of the Eurozone's top 130 banks failed the ECB's stress-tests for capital requirements, fewer than expected.

The other metals were mixed with silver dipping 0.1% while platinum and palladium added 0.2% and 0.5%, respectively.

At the Comex close: December gold edged down 2.50 cents $1,229.30; December silver dipped 2 cents to $17.16; January platinum picked up $3.60 to $1,254.50; and December palladium rose $6.25 to $787.15 an ounce.