Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold slipped 0.4% and the dollar gained in choppy trade ahead of tomorrow's Congressional testimony on monetary policy by Ben Bernanke. The minutes from the last FOMC meeting will also be released tomorrow, providing more clues to the fate of monetary stimulus. Gold fell by 2% early in the session, dropping as low as $1,358 as traders positioned themselves for any signals of an imminent reduction in quantitative easing, the Fed's money-printing progam.

Trading momentum quickly changed, however, after two more regional Fed presidents, James Bullard of St. Louis and New York's William Dudley, came out in support of continuing QE. The dollar gave up most of its early gains and gold rallied back by 1.6% to close just under $1,379. Silver dipped 0.3%, also in volatile trade, and platinum dropped 1.6% while palladium edged down by 0.2%.

At the Comex close: June gold slipped 0.4%, to $1,378.70; July silver dipped 7 cents to $22.52; July platinum fell $23.10 to $1,461.50; June palladium dropped $1.75 to $749 an ounce.

For those keeping score, that makes four Fed members speaking out in support of QE and four against in the past week. With Fed Chair Bernanke a confirmed supporter, current policy will probably remain unchanged, which is good for gold and bad for the dollar. QE has helped to boost the gold price by 60% since 2008 because it devalues the dollar and increases the risk of long-term inflation.