Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold consolidated yesterday's 0.6% rise and edged up slightly, closing above $1,318, as traders largely treaded water ahead of tomorrow's conclusion of the Fed's two-day meeting on monetary policy.

The metal was mildly supported by more disappointing data, with U.S. housing starts plunging 6% in August after two solid months of gains. Bad weather was a contributing factor, and homebuilder sentiment remains strong, but the report joins a stream of reports that signal a loss of momentum in the economy. Retail sales, industrial production, and payrolls have all fallen short of expectations in the past month, prompting the Atlanta Fed to cut is growth forecast again to 2.9% in Q3 today.

Against this background of slowing, the Fed is all but certain to leave interest rates alone this month. CME FedWatch pegs the odds at just 18%, based on Fed funds futures trading.

However, the central bank is also expected to cut to its long-range forecast on interest rates to 2.75%, according to Reuters, down from 3.75% in June 2015 and 4.25% four years ago. This means fewer and smaller rate hikes in the future, which is positive for gold.

The other precious metals were mixed, with silver and palladium slipping 0.1% and 0.4%, while platinum gained 0.7%.

At the Comex close: December gold added 40 cents, to $1,318.20; December silver fell 1 cent, to $19.28; October platinum gained $7.20 to $1,030.90; and December dipped $2.75 to $683.50 an ounce.