Daily Gold Update

Source:Dana Samuelson, American Gold Exchange

Austin— Gold and silver closed the New York session slightly lower than yesterday�s close, but moved higher in electronic trading after the conclusion of the Federal Reserve meeting. Contrarily the U.S. dollar index, which was virtually unchanged ahead of the Fed statement, fell to a 15-month low following the release of the Fed statement.

At the close of the electronic session August gold rose $10.60 to $1,260.30; September silver gained $0.15 to $16.64; October platinum gained $7.70 to $933.50; and September palladium gained $10.15 to 867.10. The U.S. dollar index fell 0.63 to 93.46, its lowest level in 15-months.

As expected the Fed left interest rates unchanged, but signaled that they would start reducing the balance sheet �relatively soon.� Traders interpreted �relatively soon� to mean beginning in September or October. Today�s Fed statement was also a dovish acknowledgement that a period of weaker than anticipated inflation persists in the U.S. economy. Specifically, the Fed said, �On a 12-month basis, overall inflation and the measure excluding food and energy prices have declined and are running below 2 percent.� While a December rate hike is still expected, the glide path for future rate hikes may be shallower than previously anticipated, hence the weakness in the dollar and the boost for gold following the release of the Fed statement.

At the Comex close: August gold dropped $2.70 to $1,249.90; September silver fell 9 cents, to $16.45; October platinum fell $9.10 to $922.70; and September palladium gained $5.95 to $862.90 an ounce.