Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold slipped 0.6% as traders took profits following yesterday's 2% surge on expectations that the Fed will postpone reducing monetary stimulus until next year. Fundamentals for the yellow metal, which has risen 5.4% since early last week, remain solid after this week's release of U.S. non-farms payroll data showed the labor market slipping last month even before the U.S. government shutdown and near-default undermined confidence and cut fourth-quarter GDP by around 0.3%.

According to recent surveys, many economists and most U.S. primary dealers now expect quantitative easing, the Fed's $85 billion-per-month bond-buying program, to continue at current levels until mid-March of next year. Primary dealers are the official trading counterparties obligated to help the Fed implement monetary policy. Tantamount to printing money, QE supports higher gold prices by devaluing the dollar and raising the risk of long-term inflation.

Most other markets also rolled back after yesterday's payrolls-report euphoria, with the Dow shedding nearly 0.3% and the Global Dow nearly 0.7% while the dollar edged up against most major rivals. Silver and platinum both finished 0.8% lower and palladium dropped 0.9%.

At the Comex close: December gold slipped $8.60 to $1,33; December silver dropped 17 cents to $22.62; January platinum lost $11.10 to $1,439.60; and December palladium gave up $6.80 to $746.10 an ounce.