Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold slipped 0.5% to close just above $1,308, a two-week low, as a rising dollar diminished demand for the metal as a store of value. U.S. service industries grew at a faster pace in October, according to the ISM, with the non-manufacturing index rising by 1% over September, to 55.4%. Readings over 50% indicate expansion. The pick-up fueled optimism that the economy may rebound more quickly than expected from last month's partial government shutdown and near-default.

The dollar climbed immediately after the data as traders saw the odds improving that the Fed may taper quantitative sooner than March if the economy shows additional signs of strength. The dollar was also supported by European Commission's downgrade of eurozone growth forecasts for 2014, adding to speculation the ECB will cut rates on the euro in the near future, making the dollar relatively more attractive to Forex traders. A rising dollar weighs on the price of gold and other commodities that are denominated in dollars internationally. Silver dropped 0.3% and platinum lost 0.4% while palladium bucked the trend by edging up 0.1%.

At the Comex close: December gold slipped $6.60 to $1,308.10; December silver dipped 6 cents to $21.64; January platinum dropped $6.20 to $1,450; and December palladium picked up 80 cents to $750.30 an ounce.

">Bank of America is now bullish on gold, saying in a research note this week that the recent downtrend is coming to an end and gold prices of $1,433 in the short-term and above $1,500 in the longer term are on the horizon.