Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.9% in regular trade, closing at a one-week high above $1,176, as the dollar rolled back ahead of the conclusion of the Fed's two-day meeting on monetary policy. It then surrendered those gains and more after hours, falling to $1,164 within minutes, when the Fed's post-meeting statement suggested a possible rate increase in December.

The central bank held interest rates near zero as expected, saying again that it needs to be "reasonably confident" of inflation trending toward 2% and of continued health in the job market before raising rates.

However, in a surprising departure from previous statements, the committee introduced a specific time element into its decision for the first time, saying it will determine �whether it will be appropriate to raise the target range at its next meeting.� Past language about timing had always been vaguer and more open-ended.

Traders took the shift in forward guidance to mean a December hike is very much on the table, depending on how the economy performs in the interim. The markets responded swiftly and strongly, with the Dow surrendering earlier gains of 130 points before rebounding fully. The dollar swung 1%, from losing 0.2% to gaining 0.8%, first supporting and then pressuring gold and other commodities denominated in it for international trade.

The other precious metals rose in regular session trade before falling back after hours. Silver jumped 2.7%, then gave back 1.1%. Platinum added 2.4% before surrendering half in electronic trade. Palladium picked up 1.1%, then retreated to a gain of 0.3% on the day.

At the Comex close: December gold gain $10.30 to $1,176.10; December silver jumped 43 cents to $16.293; January platinum added $23.60 to $1,012.80; and December palladium picked up $7.35 to $686.10 an ounce.