Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.8% to close above $1,240 as the dollar weakened ahead of this week's meeting of the Federal Reserve, spurring demand for alternative stores of value.

The Fed is almost certain to leave interest rates unchanged when the committee gathers to chart monetary policy later this week, proceeding with the caution outlined by recently Janet Yellen. Slowing global and domestic growth have thrown a wrench in to the plans laid out by the central bank in December when they rose rates for the first time in nearly a decade and forecasted up to four more hikes this year.

The dollar weakened as traders trimmed positions ahead of the FOMC meeting, with the ICE Dollar Index dropping as much as 0.4% early in the session. A softer dollar support gold and other commodities denominated in it for international trade by making them less expensive overseas.

Gold also received support from safe-haven inflows after U.S. new home sales dropped unexpectedly in March and equities weakened, pulled lower by weak earnings and falling oil prices. The Dow was down 0.3% while the Global Dow fell twice that much.

Hedge funds and other large money-managers continue to be bullish on gold's prospects, long positions in gold futures on Comex rising to the highest level in more than three years last Friday.

The other precious metals were mostly higher, with silver and platinum rising 0.6% and 0.7%, respectively, while palladium dipped 0.1%.

At the Comex close: June gold gained $10.20 to $1,240.20; May silver added 11 cents, to $17.01; July platinum picked up $7.60, to $1,018.50; and June palladium dipped 60 cents to $605.60 an ounce.