Daily Gold Update

Source: Dana Samuelson, American Gold Exchange

Austin, TX— Markets seesawed following Fed Chair Janet Yellen�s speech today as traders tried to glean new insight into the Fed�s monetary intentions in the coming months. While offering no timetable for future Fed rate hikes, Yellen said, �In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months.�

Overshadowing Yellen�s comments in a CNBC interview, Federal Reserve Vice Chairman Stanley Fischer said two interest-rate hikes by the end of the year were possible, depending on the strength of economic data, �but these are not things we know until we see the data.� After Yellen�s speech but prior to Fischer�s comments, the dollar fell to a daily low and precious metals and stocks rallied sharply to daily highs. Fischer�s comments, however, caused markets to abruptly reverse course, boosting the dollar over a full point from its 94.2 low to a high of 95.58 on the U.S. dollar index. This dollar reversal in turn caused precious metals and stocks to shed their short lived gains.

Gold tested both short-term support (for the December contract) at $1,321 and resistance at $1,345 today, for a $24 swing, as markets reacted first to Fed Chair Yellen�s speech and then to Fed Vice Chair Fischer�s interview. Silver was also volatile, with the December contract trading in a 53 cent range between $18.50 and $19.03 today. When all was said and done, however, precious metals closed the New York session relatively unchanged from yesterday considering how much media and market anticipation has been placed on Yellen�s speech.

Earlier in the day U.S. GDP for the tepid 2nd quarter was revised down from 1.2% to 1.1%. Consumer sentiment was also revised marginally lower for August from 90.4 to 89.8 according to the University of Michigan�s latest report. Clearly though, the news of the day were the comments from various Fed members attending the annual Fed monetary policy symposium.

At the Comex close: December gold rose $3.00 to $1,327.60; December silver gained 12 cents to $18.73; October platinum dropped $5.40 to $1,071.60; December palladium gained 90 cents to $688.30 an ounce.