Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold fell 1.2% to finish under $1,400 as traders, closing the books on August ahead of a long weekend, took profits from the metal's second consecutive month of gains. The dollar rose for the third straight week, further pressuring gold, behind expectations that the Fed will start its taper of quantitative easing in September. This week's revision of Q2 GDP up from 1.7% to 2.5% potentially bolstered the case for tapering next month. But today's releases of weaker data on spending, consumer sentiment, and inflation complicate the outlook for Q3 growth.

Despite today's retracement, gold finished August with a gain of 6.4% for a two-month rise of nearly 14%. Silver dropped 2.6% today but still gained a whopping 20% for the month. Platinum added 0.3% for the day and 6.8% for the month. Sister-metal palladium dropped 2.2% today to end August 0.2% lower.

At the Comex close: December gold fell $16.80 to $1,396.10; December silver dropped 63 cents to $23.51; October platinum added $4.70, to $1,527.10; and December palladium surrendered $16.25 to $723.85 an ounce.

Gold traders are now at their most bullish in five months, according to the latest Bloomberg survey. Pending military intervention by the U.S. and its allies in Syria is stimulating demand for gold as a store of value. Concerns are growing that disruptions in oil supplies may feed higher inflation and undermine the global recovery. Holdings in gold-backed ETFs rose by 2.6 tons this week for the third straight weekly increase, signaling a substantial rebound in the paper-gold markets.