Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold inched marginally higher, holding onto its 1% gain from the previous session, as traders reassessed whether the Fed will begin to taper quantitative easing when it meets next week. Friday's non-farm payrolls report fell well-short of forecasts, underscoring persistent weakness in the labor market and raising the possibility that the Fed may postpone the taper for a month or two. San Francisco Fed President John Williams said today the taper's start date is undecided though likely by year-end. He also said near-zero interest rates will remain in place until after unemployment falls to 6.5% from its current 7.3%, probably in mid-2015.

The dollar fell against most major rivals and Treasury prices rose as a September taper begins to seem less likely. QE has boosted gold prices by devaluing the dollar and increasing the risk of long-term inflation. It has also support higher equities prices by flooding the market with cheap liquidity and encouraging risk-taking by investors. The Dow and Global Dow both added nearly 1%, aided by upbeat Chinese trade data. The other precious metals finished lower, with silver slipping by 0.7% while platinum and palladium dropped 0.8% and 2%, respectively.

At the Comex close: December gold added 20 cents, to $1,386.70; December silver slipped 17 cents to $23.72; October platinum dropped $12.70 to $1,483; and December palladium lost $13.85 to $683 an ounce.

Bloomberg reported that hedge funds are bullish on gold , holding their most net-long positions since January, on growing worries that Middle East tensions will curtail oil supplies and increase inflation.