Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold slipped 0.6% to close under $1,239 as a broadly higher U.S. dollar reduced demand for the metal as a store of value. Anticipating further reductions in monetary stimulus when the Fed meets on January 29, currency traders bid up the dollar against most major rivals. A stronger dollar weighs on the price of precious metals and other commodities denominated in dollars for international trade by making them more expensive to holders of other currencies.

At its December meeting, Fed announced a $10 billion taper of its monthly purchases of long-term securities, a program known as quantitative easing, down to $75 billion. Another $10 billion cut is widely expected at this month's meeting, despite mixed economic reports over the last few weeks including the weakest U.S. non-farm payrolls report in three years. QE has supported higher gold prices by devaluing the dollar and increasing the risk of long-term inflation.

The other precious metals were mixed. Silver edged down 0.2% while platinum and palladium added 0.6% and 0.1%, respectively, supported by pending strikes at South African mines.

At the Comex close: February gold slipped $3.20 to $1,238.60; March silver dropped 3 cents to $19.84; April platinum gained $8.90 to $1,462.40; and March palladium picked up 80 cents to $748.85.