Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gold slipped 0.3% to close under $1,246 as a hawkish rate view from the ECB and BoE boosted bond yields, eroding demand for alternative assets.

Central bankers in Europe and Britain sent signals this week that the era of ultra-loose monetary policies may be coming to an end. Mario Draghi of the European Central Bank and Mark Carney of the Bank of England separately said policy is likely to tighten in coming months to offset growing inflationary pressures.

The prospective lessening of stimulus overseas led yields higher on most sovereign bonds, including Treasurys, making gold less attractive as a store of value.

Stopping gold's losses, the dollar fell against major rivals, touching the lowest level since last October, as traders shifted toward the euro and pound. Falling dollar supports gold by making it less expensive overseas.

Adding to the buck's woes, St. Louis Fed President James Bullard said the current level of U.S. interest rates is "appropriate" for the low-growth, low-inflation environment in which the U.S. economy is presently mired. A pause in rate hikes pressures the dollar by making it less attractive to forex traders seeking higher yield.

The other precious metals were also lower, with silver dropping 0.8% while platinum and palladium dropped 0.1% and 1%, respectively.

At the Comex close: August gold slipped $3.30 to $1,245.80; September silver dropped 14 cents to $16.65; October platinum dipped $1.10 to $923.10; and September palladium lost $8.50 to $846.10 an ounce.