Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold slipped 0.3% on rising risk appetite ahead of this week's meeting of the FOMC. Anticipating that the Fed will refrain from tapering quantitative easing, its program of buying $85 billion in long-term bonds each month in order to stimulate growth and reduce unemployment, traders increased their positions in equities, driving the Dow higher by more than 0.7% and the Global Dow by 1%. Precious metals fell across the board on reduced safe-haven demand. Silver shed 0.9% while platinum and palladium dropped 0.9% and 1.9%, respectively.

At the Comex close: August gold slipped $4.50 to $1,383.10; July silver dropped 19 cents to $21.76; July platinum shed $12.60 to $1,434.80; September palladium lost $13.85 to $717.85 an ounce.

Fed Chair Ben Bernanke roiled the markets by telling the Senate in late May that the Fed could begin tapering stimulus in June if economic conditions improved. The hypothetical remark sent U.S. equities into a two-week slump and undercut momentum in the gold market. After a series of tepid economic reports, however, including a contraction in manufacturing and an up-tick in the unemployment rate, the consensus now is that sluggish U.S. growth doesn�t justify the curtailment of easing. QE has helped gold to surge by 60% since 2008 because it devalues the dollar and increases the risk of long-term inflation. It has also spurred record-high rallies in equities by flooding the markets with cheap cash and encouraging investors to take risk.