Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold slipped 0.5%, closing at a two-week low near $1,288 as higher stocks reduced safe-haven demand. But it quickly recouped most of those losses, bouncing back to $1,291 in electronic trade after the minutes from the latest FOMC meeting showed a continued dovish attitude toward monetary policy.

In the newly released minutes, the Fed emphasized the value of ongoing stimulus to support employment growth, saying it poses little risk of triggering short-term inflation. Following yesterday's comments by New York Fed chief William Dudley, that any raising of interest rates is likely to happen very slowly, the minutes underscored continuity in the Fed's accommodative policies, which help gold by hurting the dollar. Denominated in dollars internationally, gold becomes less expensive for holders of other currencies when the dollar weakens. Near-zero interest rates also support gold by reducing opportunity costs for holding the metal, which offers no yield.

Reversing a two-day losing trend, the Dow gained nearly 1% and the S&P 500 more than 0.8%, boosted by the Fed's generally optimistic tone and reassurances that interest rates will remain low. The other metals were mixed at closing. Silver slipped 0.3% before erasing those loses after hours. Platinum and palladium added 0.4% and 0.6%, respectively, before slipping slightly in electronic trade.

At the Comex close: June gold slipped $6.50 to $1,288.10; July silver dipped 6 cents to $19.34; July platinum added $6, to $1,474.90; and June palladium picked up $4.60, to $830.45 an ounce.