Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold inched higher and the dollar edged lower after two prominent Fed officials, including Vice Chair Janet Yellen, voiced support for maintaining monetary stimulus. In letters to lawmakers written in support of her nomination as Fed Chair, Yellen echoed her dovish testimony of last week, saying that "a strong majority of the FOMC judges that asset purchases have been effective." Yellen has repeatedly emphasized the need to maintain quantitative easing, the Fed's program of buying $85 billion in bonds each month, in order to promote growth and lower unemployment.

In addition, Chicago Fed President Charles Evans said today that the central bank should wait until next year before start to taper QE. Declaring that he's "not in a hurry to reduce the flow" of asset purchases, Evans said the FOMC needs more evidence that improvements in the labor markets are sustainable. Gold dropped under $1,300 an ounce earlier this month after a stronger-than-expected GDP report prompted concerns that the Fed would curtail QE in their December meeting. QE supports higher gold prices by devaluing the dollar and increasing the risk of long-term inflation.

The other precious metals were mixed, with silver slipping 0.1%. Platinum and palladium gained 0.6% and 0.7%, respectively, supported by supply concerns after South Africa's primary electricity provider declared an emergency that may reduce mining operations. South African mines produce nearly three-quarters of the world's platinum and more than a third of its palladium.

At the Comex close: December gold added $1.20, to $1,273.50; December silver slipped 2 cents to $20.33; January platinum gained $8.90 to $1,419; and December palladium rose $5.15 to $721.90 an ounce.