Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.4% to close above $1,954 as the dollar fell and oil rose, boosting demand for alternative stores of value ahead of this week's Fed meeting. It was the metal's third straight winning session and highest finish in nearly three weeks.

The dollar slipped 0.2% against major rivals as traders anticipate that the Fed will hold interest rates steady when it commences its two-day meeting on policy tomorrow. Fed fund futures now project a 99% certainty of no change, up from 97% on Friday.

By contrast, other major central banks are still raising rates, making the buck slightly less attractive to currency traders. The Bank of England raised rates by a quarter-point on Monday and Sweden is expected to do the same on Thursday. The ECB hiked last week, and Japan has been signaling the possible end of negative interest rates.

A falling dollar supports gold and other commodities by making them less expensive in other currencies, boosting overseas demand.

Benchmark 10-year Treasury yields slipped slightly, adding further support to gold by decreasing he oppositely cost for holding it instead of bonds as a safe-haven asset.

Oil extended its rally, with US benchmark WTI crude adding another 0.8% to settle just under $91.50 after data showing China's industrial consumption improved last month, increases demand expectations. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were mostly higher, with silver and platinum rising 0.5% and 1%, respectively, while palladium slid 0.7%.

At the Comex close: December gold gained $7.20 to $1,953.40; December silver climbed 11 cents to $23.50; October platinum picked up $8.80 to $938.30; December palladium dropped $8.70 to $1,244 an ounce.