Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold slipped 0.1%, posting its third straight losing session, after comments from Fed officials signaled a possible reduction of monetary stimulus by the third quarter. San Francisco Fed President John Williams, a policy centrist, said late yesterday that the $85 billion-a-month asset purchase plan known as quantitative easing may start tapering off this summer, if all goes well. Forecasting that the economy will begin to �meet the test for substantial improvement in the outlook for the labor market� by summer, he advocates paring the program gradually for the rest of the year. Separately, Kansas City Fed President Esther George argued for removing stimulus, warning that ultra-easy monetary policies are �causing distortions and posing risks to financial stability and long-term inflation.� QE has helped to gold price to nearly double since 2008 in part because it devalues the dollar and increases the risk of long-term inflation.

The Bank of Japan announced an aggressive new easing program today, substantially expanding its purchases of long-term bonds, as newly-appointed BOJ governor Haruhiko Kuroda promised to do �whatever it takes� to drive inflation up to 2% . The yen immediately plummeted and the dollar rallied, driving gold to as low as $1,544. However, after the European Central Bank announced it will keep monetary policy unchanged, the euro quickly rallied and the dollar slid back into negative territory, enabling gold to recoup most of its earlier losses. A weaker dollar supports higher gold prices because the metal is denominated in dollars internationally and becomes less expensive to holders of foreign currencies. Silver also slipped 0.1% while platinum and palladium dropped 1.6% and 4%, respectively,

At the Comex close: June gold slipped $1.10 to $1,552.40; May silver dropped 3 cents to $26.77; July platinum lost $24.10 to $1,517.80; and June palladium tumbled $30 to $725.45 an ounce