Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.5% for its eighth winning session in the last ten behind a softer dollar and tighter global gold supplies. The dollar fell against most major rivals as forex traders hedged their positions ahead of tomorrow's release of the minutes from the Fed's July meeting. While most analysts expect the Fed to begin tapering its asset-buying program known as quantitative easing in September, hints of hesitancy in the Fed minutes could weaken the dollar and boost gold. A falling dollar supports higher gold by making it more expensive in other currencies. The other metals were mixed. Silver and palladium bit dropped 0.4% while platinum added 1.1%.

At the Comex close: December gold gained $6.90 to $1,372.60; September dropped fell over 9 cents to $23.07; September palladium lost $3.25 to $749.65; and October platinum picked up $16.50 to $1,525.50.

Gold has now gained more than 8% in August, largely because of robust global demand for physical bullion, especially in Asia. According to Bloomberg, gold traders and analysts surveyed last week at the Indian Gold Convention forecast prices reaching as high as $1,450 an ounce by the end of 2013, propelled by the growing Asian appetite for gold coins, bars and jewelry. Gold purchases surged 71% in India last quarter and 87% in China, according to a World Gold Council report released last week. This surge in demand for physical gold has driven the cost of borrowing gold to a 4.5-year high in the London market, indicating a severe tightening of supplies.