Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold slid 0.8% to close above $1,346 after mixed rate messages from the Federal Reserve boosted the dollar and nudged traders into taking profits from recent gains. The metal closed up 0.2% for the week.

New York Fed President William Dudley said yesterday that another rate hike "is edging closer," perhaps putting September's FOMC meeting into play. A close ally of Janet Yellen, Dudley is optimistic that GDP and job growth will improve in the second half of the year although inflation and wage pressure may remain muted.

Separately, John Williams of the San Francisco Fed said he like to see a rate hike "sooner rather than later" because, in his assessment, "the broader economy is in good shape" and waiting too long may incur risks. Atlanta Fed President Dennis Lockhart recently that at least one increase this year is probably warranted because of the improving economy.

These relatively hawkish statements conflict with Wednesday's release of dovish minutes from the July Fed meeting, which showed little urgency to raise rates among Fed officials. They also differ from St. Louis Fed President James Bullard's position, reiterated earlier this week, that the U.S. will be mired in a low-growth, low-inflation phase "for the foreseeable future." Bullard said there is no need to raise key interest rates above 63 basis points, only slightly more than present levels, for a very long time to come.

The dollar recovered 0.4% from an eight week low on the mixed Fed signals, aided by a sharp drop in the UK pound after reports that Britain's official exit from the EU may begin in early 2017, much earlier than expected. A stronger dollar pressures gold and other commodities priced in it for overseas trade.

The other precious metals lower for the session and mixed on the week. Silver fell 2.1% today for a weekly loss of 2%. Platinum fell 1% on the day and 1.3% on the week. Palladium slid 0.6% but finished the week 2.7% higher.

At the Comex close: December gold slipped $11 to $1,346.20; September silver fell 42 cents to $19.32; October platinum dropped $14.80 to $1,118.40; and September palladium slipped $4.05, or 0.6%, to $709.35 an ounce, for a weekly gain of 2.7%.