Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold edged up slightly to close above $1,244 but still took a weekly loss of 3.4%, the most in ten weeks, as traders fretted over the timing of reductions in monetary stimulus. The dollar slipped against most rivals, offering mild support to gold and other commodities that are priced in dollars for international trade. With inflation falling and confidence building that the recovery has regained momentum, investors continue to shift from safe-havens toward risk. The Dow added another 0.3% for its forty-first record close of the year, and the S&P 500 closed at a new record high above 1,800.

Gold came under strong selling pressure midweek after the minutes of last FOMC meeting showed central bankers leaning toward tapering quantitative easing, the Fed's program of buying $85 billion in long-term bonds each month, perhaps as early as December. Tantamount to printing money, QE has helped to lift gold by devaluing the dollar and increasing the risk of long-term inflation. The taper, conversely, is likely to support the dollar and weigh on the price of precious metals. Bucking the downtrend with remarkable optimism, call options to buy gold at $3,000 an ounce were the most actively traded contracts on Comex for the second straight day.

The other precious metals were mixed. Silver slipped 0.4% for a weekly loss of 4.2%. Platinum fell 0.7% to lose 3.9% this week. Palladium edged up 0.1% today but closed the week with a loss of 2.5%.

At the Comex close: December gold edged up 50 cents to $1,244.10; December silver slid 7 cents to $19.86; January platinum lost $9 to $1,382.70; and December palladium added 80 cents to $714.05 an ounce.