Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slipped 0.2% to close the regular session below $1,785 as traders positioned for a potentially hawkish tone to the minutes from the Fed's July meeting. The metal then popped up above $1,790 in electronic trade after the release signaled a divided Fed that is unlikely to change policy before 2022.

While the Fed's policy statement after the late July meeting suggested confidence in the US economy despite the resurgent pandemic, the minutes of the meeting revealed a more riven and worried committee. Several members expressed deep unease that "the spread of the Delta variant could cause delays in returning to work and school, and so damp the economic recovery."

Although most central bankers felt employment and inflation benchmarks for reducing monetary support could be met later this year, there was no consensus on next steps. Some members urged curtailing inflation while others argued for patience and continued support to put Americans back to work.

Traders were prepared for stronger indications that the dreaded taper of quantitative easing, which gradually tightens the money supply by reducing bond purchases by the Fed, might begin this fall. The minutes revealed a less unified Fed, one that is unlikely to announce the taper before November or begin it before 2022.

Tantamount to printing money, quantitative easing floods the financial system with cheap cash to promote spending and lending, undercutting the dollar and spurring inflation. Gold thrives in this environment as investors seek alternative stores of value to preserve purchasing power.

The dollar surrendered early session gains after the Fed minutes, further supporting gold by making it less expensive in other currencies.

The other precious metals were mixed. Silver fell 1% before the Fed minutes, then pared its loss to .6% after. Platinum added 0.3% and held that gain while palladium lost 2.9% and held that loss after the Fed minutes.

At the Comex close: December gold dipped $3.40 to $1,784.40; September fell 24 cents to $23.42; October platinum added $2.60, to $996.40; and September palladium dropped $72.30 to $2,423.30 an ounce.