Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold slipped less than 0.1% to close at $1,231.50 as US government bond yields rose ahead of this week's meeting of the Federal Reserve, undermining demand for alternative stores of value.

Yields on 10-year Treasury notes climbed to nearly 3% in anticipation that the Fed will telegraph more rate hikes to come at this week's meeting on monetary policy. Last week, yields notched their best week in two months on strong US growth and expectations that the Bank of Japan may begin to unwind its easy-money policies, in part by lowering its inflation target from 2% to 1.5% at its meeting this week.

With no increase expected from this week's Fed meeting, traders are bracing for a clear statement that a September hike is coming, and probably another in December. Rising interest rates cause investors to sell lower-yielding assets, including gold, which offers no yield.

The dollar fell 0.3% against major rivals, stemming gold's slide, as the yen rose on speculation about monetary tightening in Japan. A weaker dollar typically supports gold and other commodities priced in it for global trade by making it less expensive overseas.

The other precious were mixed, with silver and palladium adding 0.3% and 0.4%, respectively, while platinum slipped less than 0.1%.

At the Comex close: December gold inched down $1.20 to $1,231.50; September silver rose 4 cents to $15.54; October platinum dropped 20 cents to $831.50; and September palladium picked up $4 to $922.50 an ounce.