Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Washington— Gold edged up less than 0.1% to close under $1,069 ahead of the release of minutes from the latest Fed meeting, and then jumped as high as $1,175 in electronic trade when the minutes signaled uncertainty about a December lift-off. The metal then gave up some gains, sliding back around $1,170 as traders digested the release and the dollar rallied.

The minutes from the October meeting of the FOMC indicated that "most participants" expect the criteria for the first rate increase in nine years "could well be met by the time of the next meeting." However, a majority said a December hike was not automatic. Rather, further gains in the labor markets and inflation would be a precondition to begin normalizing rates. A majority also stipulated that any subsequent increases would be "gradual."

Most traders viewed the minutes a somewhat more dovish than expected, causing the dollar to drop abruptly and gold to jump after hours. Higher rates would support the dollar by increasing yield on U.S. fixed-income assets, in turn pressuring gold and other commodities denominated in the currency.

However, further reflection and hawkish comments by several Fed officials caused sentiment to backtrack, boosting the dollar and eroding gold's gains. Speaking at a conference in New York, three regional Fed presidents–New York's William Dudley, Cleveland's Loretta Mester, and Atlanta's Dennis Lockhart�all sounded supportive of a December hike, with Lockhart saying that the criteria for a rate hike have been met.

The other precious metals also finished lower, with silver sliding 0.4% while platinum and palladium lost 0.8% and 1.6%, respectively.

At the Comex close: December gold added 10 cents, to $1,068.70; December silver slid 6 cents to $14.11; January platinum dropped $6.90 to $848.10; and December palladium $9.20 $537.30 an ounce.