Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold slipped 0.3% to close under $1,225 after strong jobs data rallied the dollar and reduced the metal's appeal as an alternative store of value. ADP reported that private companies added 238,000 jobs in December for the largest monthly gain in more than a year. Signaling momentum in labor markets, the upbeat report rallied the dollar to a four-month high against a basket of rivals. The higer buck weighed on the price of gold and other commodities that are denominated in dollars for international trade.

Gold was further hampered by the release of minutes from the last FOMC meeting showing that the majority of voting members believe the effectiveness of quantitative easing, the Fed's program of buying long-term bonds to stimulate the economy, is declining relative to its risks. Treading cautiously so as not to trigger a rise bond yields that could stifle the recovery, the central bankers also stressed that the taper is not on a preset course. Tantamount to printing money, QE has spurred higher gold and stock market prices by flooding the economy with liquidity and raising the risk of long-term inflation.

The Dow and S&P 500 also rolled back on the Fed minutes while precious metals and other commodities fell across the board. Silver dropped 1.3%; platinum dipped 0.1%, and palladium lost 0.5%.

At the Comex close: February gold slipped $4.10 to $1,225.50; March silver dropped 25 cents to $19.54; April platinum for dipped $1.20 to $1,414.20; and March palladium lost $3.40 to $738.30 an ounce.