Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold slipped 0.4% on a slightly stronger dollar and profit-taking from last week's 4.5% rally. Stocks, bonds, precious metals�asset classes that seldom rise and fall in unison�all lost ground together as traders prepared for this week's release of minutes from July's FOMC meeting, due Wednesday and widely expected to signal support for starting a taper quantitative easing in September. The Dow and S&P 500 dropped around 0.5%, suffering their first four-day losing streaks of 2013, while Treasury yields jumped to the highest level in two years. The other precious metals followed gold lower, with silver dropping 0.7% while platinum and palladium lost 1.2 % and 1.3%, respectively.

At the Comex close: December delivery slipped $5.30 to $1,365.70; September silver dropped 16 cents to $23.17; October platinum lost $18.60 to $1,509; and September palladium fell $10.15 to $752.90 an ounce.

U.S. stock indexes and bond prices have gained dramatically in recent years as ultra-loose monetary policies flooded the economy with cheap liquidity, forcing down yields and encouraging investors to seek out risk. Hedging against the growing likelihood of a September taper, traders are shifting to safe havens like cash, gold, and silver. Bloomberg reported that net bullish positions on gold among hedge funds and other large-scale speculators rose 18% and short positions declined by 17%, while bullish bets on silver increase 162% last week

As last week's surges of 14% for silver and 4.5% for gold indicates, global demand�especially for physical metals�is building once again despite the fact that reductions QE will support a stronger dollar, which typically weighs on both metals by making them more expensive for holders of other currencies. Asian markets are especially strong, with gold bullion purchases in China and India projected to reach a record 1,000 tons this year, according to figures released last week by the World Gold Council.