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Daily Gold Update
Current precious metals news

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Daily Gold Update presents a recap on today's action in the precious metals markets. View archives.


September 29: Gold adds 0.3% after Hong Kong unrest

Source: Dr. Bill Musgrave, American Gold Exchange

Austin -- Gold gained 0.3% to close just under $1,219 as pro-democracy riots in Hong Kong spurred a pullback in global equities, increasing safe-haven demand.

Protests against China's decision to limit Hong Kong elections turned violent as police used pepper spray to disperse tens of thousands of students who had taken to the streets, closing banks and offices and disrupting the city's extensive financial district. The Hang Seng equity index tumbled 2% while the Asia Dow dropped 1% and the U.S. Dow slid 0.25%.

Gold initially rose as high as $1,223 before reports that U.S. consumer spending rose 0.5% in August after a flat July, adding to speculation that momentum in the U.S. recovery may prompt the Fed to raise rates earlier than expected. Chicago Fed President Charles Evans discounted sooner tightening, however, telling CNBC that it will be "quite some time before it becomes appropriate the raise rates," probably after next summer. Last Friday, the Atlanta Fed's Dennis Lockhart made a similar case against earlier hikes, saying persistently weak demand, at home and abroad, is still hampering the economy.

The other precious metals tracked higher with gold. Silver edged up 0.2% while platinum added 0.6% and palladium picked up 0.7%. At the Comex close: December gold gained $3.65 to $1,218.80; December silver added more than 3 cents to $17.57; January platinum rose $7.80 to $1,309.50; and December palladium climbed $5.48 to $789.50 an ounce.




September 26: Gold slides on dollar, revised GDP

Source: Dr. Bill Musgrave, American Gold Exchange

Austin -- Gold slipped 0.5% to close below $1,216 as a higher GDP revision for the second quarter boosted the dollar and helped U.S. equity markets rebound after yesterday's sell-off. The metal finished the week 0.1% lower.

The U.S. economy grew at an annual rate of 4.6% from April through June, rather than the 4.2% reported last month, the Commerce Department said today, marking its best quarter since 2011. The revision signals a marked improvement over the first quarter's 2.1% contraction, with the biggest gains coming in health care spending and business investment. Overall growth for the year is expected to hold around 3%, although continued strength in the dollar could impair it by reducing demand for U.S. exports, which become more expensive as the dollar rises relative to other currencies.

Two Fed officials voiced concern about the effects of the dollar's rise this week. William Dudley of the New York Fed said rapid rises in the currency work against the goals of boosting employment and combatting deflation by making U.S. exports less competitive and imports cheaper. Atlanta Fed President Dennis Lockhart today added that recent dollar appreciation exacerbates the weak domestic and international demand that already hamper the recovery, and may justify delaying any rate increases until later next year.

The Dow recouped 1% and the S&P 500 nearly 0.8%, pulling investors away from safe havens like gold and Treasurys. The ICE Dollar Index, which measures the currency against a basket of rivals, gained for the eleventh straight week, largely behind expectations the U.S. soon tighten monetary policy while other major economies, especially Europe and Japan, loosen it further.

The other precious tracked fell harder than gold, with silver dropping 0.6% for the day and week. Platinum lost 0.9% today and 2.6% this week, while palladium tumbled 2.3% to close the week down 3.5%.

At the Comex close: December gold slid $6.50 to $1,215.40; December silver dropped 10 cents to $17.48; October platinum fell $12.20 to $1,302; and December palladium tumbled $18.65 to $783.55 an ounce.




September 25: Gold gains as equities plummet

Source: Dr. Bill Musgrave, American Gold Exchange

Austin -- Gold gained 0.2% to close near $1,222 as a massive sell-off in U.S. and global equities increased demand for safe havens.

The Dow tumbled more than 260 points in its worst day in eight months, falling back under 17,000, while S&P 500 surrendered 1.6% and the Global Dow fell nearly 1.2%. The sell-off was triggered in part after Russia initiated legislation to seize foreign assets in retaliation for sanctions, especially in Italy, where some assets belonging to Putin's friends were recently seized.

Equities were also pressured by upbeat U.S. data suggesting that the Fed might raise interest rates sooner than mid-2015, reducing the excess liquidity that's helped to fuel the markets' record runs. Orders for durable goods in August—apart from a huge drop in airplanes sales following a surge in July—signaled an uptrend in planned business spending and a rise in perceived economic momentum. In addition, jobless claims rose by less than forecast last week, underpinning optimism about the labor market.

On the other hand, consumer confidence fell to a four-month low, as measured by the Bloomberg Consumer Comfort Index. And three prominent Fed officials yesterday called for patience in raising interest rates until the economy can withstand higher borrowing costs.

The dollar rallied on the upbeat data, pressuring precious metals and causing gold to fall as low as $1,208 early in the session before rebounding sharply as investors sought protection from plummeting stocks. Treasure prices rose alongside gold. The other metals closed lower, with silver dropping 1.5%, platinum 0.4%, and palladium 2.1%

At the Comex close: December gold picked up $2.40 to $1,221.90; December silver fell 26 cents to $17.38; October platinum dropped $5.20 to $1,314.20; December palladium plunged $17.30 to $802.20 an ounce.




September 24: Gold slips after upbeat housing data

Source: Dr. Bill Musgrave, American Gold Exchange

Austin -- Gold slipped 0.2% to close under $1,220 after unexpectedly strong housing data stoked risk appetite and boosted the dollar, reducing safe-haven bids.

Sales of new homes jumped 18% in August to the highest level since June 2010, the Commerce Department reported today. Although the sample size is small and the data subject to revision, the report helps to allay fears that the crucial recovery in the housing sector is faltering. Sales of existing U.S. homes fell nearly 2% in August, the first monthly decrease since March, and new housing starts also dropped last month.

The dollar rallied to a four-year high against a basket of rivals on the home-sales data, pressuring gold and other commodities denominated in it for international trade by making them more expensivr for foreign buyers. The Dow jumped nearly 1% and the S&P 500 picked up 0.8%.

The other precious metals were mostly lower, with silver sliding 0.4% and platinum dropping more than 1% to a nine-month low. Palladium bucked the trend by adding 0.5%.

At the Comex close: December gold $2.50 to $1,219.50; December silver slid 7 cents to $17.64; October platinum dropped $13.30 to $1,319.40; and December palladium added $4.25, to $819.50 an ounce.




September 23: Gold gains 0.3% on Syria, dollar

Source: Dr. Bill Musgrave, American Gold Exchange

Austin -- Gold gained for a second day, adding 0.3% to close at $1,222, as U.S. missile strikes in Syria and a falling dollar spurred safe-haven buying. Physical demand appears to be rising, with the U.S. Mint selling 43,200 ounces in gold coins so far this month, marking a 73% increase over August and the best month since June.

In cooperation with Arab allies, the U.S. launched its first strikes against rebel and ISIS forces in Syria, expanding the scope of military actions in the Middle East. Warplanes and ship-launched missiles bombed dozens of targets, killing at least 70 ISIS fighters.

Mixed economic data out of China also supported safe-haven bids for gold. China's Beige Book showed slower growth, reduced business investment, and rising borrowing costs. These impediments in the world's second largest economy were somewhat offset by an unexpected rise in manufacturing.

The dollar lost ground against most rivals on speculation that softer recent housing will keep the Fed from raising interest rates by the middle of next year. Sales of existing U.S. homes fell nearly 2% in August, the first monthly decrease since March, and new housing starts also dropped last month.

The other precious metals were mostly higher, with platinum and palladium picked up 0.2% and 1.5%, respectively, while silver was virtually flat with a 1 cent rise. At the Comex close: December gold gained $4.10 to $1,222; December picked up one cent to $17.71; October platinum added $2.50, to $1,332.70; and December palladium rose 12.35 to $815.25 an ounce.




September 22: Gold edges up on safe-haven demand

Source: Dr. Bill Musgrave, American Gold Exchange

Austin -- Gold edged up slightly to close near $1,218 as faltering global stock prices stimulated safe-haven demand.

The Dow lost more than 100 points and the Global Dow dropped 0.8% as weaker U.S. data combined with softer economic outlooks in China and Europe to reduce risk appetite. Treasure prices rose alongside gold on flights to safety.

Sales of existing U.S. homes fell nearly 2% in August, the first monthly decrease since March, and national economic activity fell below trend, according to the Chicago Fed. China's Finance Minister, Lou Jiwei, acknowledged that the world's second-largest economy is facing downward growth pressure. And ECB chief Mario Draghi said today that persistent Eurozone underperformance is likely to force radical stimulus measures like Fed-style quantitative easing.

The other metals failed to follow gold higher. Silver and platinum slid 0.5% while palladium dropped 1.1%.

At the Comex close: December gold added $1.30, to $1,217.90; December silver slid 8 cents to $17.70; October platinum slipped $7.10 to $1,330.20; and December palladium dropped $9.45 to $802.90 an ounce.




September 19: Gold drops again as dollar rallies

Source: Dr. Bill Musgrave, American Gold Exchange

Austin -- Gold dropped another 0.8%, closing at a nine-month low under $1,216, as a rising dollar continued to draw investors away from alternative assets.

The dollar rose against most major rivals on speculation that U.S. interest rates will increase by more next year than previously forecast. In a policy statement issued this week, the Fed maintained its stance that rates will stay near zero for a "considerable time" after quantitative easing concludes next month. However, the central bank raised its median estimate for the federal funds rate to 1.375% from 1.125% by the end of 2015, implying a steeper rise once increases begin.

Higher interest rates strengthen the dollar and weigh upon precious metals and other commodities denominated in it for international trade. Higher rates also increase the opportunity cost for investors to hold gold and silver, which offer no yield, instead of bonds.

The Dow crept slightly higher on growing optimism following an uptick in leading economic indicators. The other precious metals fell harder than gold, which lost 1.2% on the week. Silver tumbled 3.6% to a four-year low. Platinum and palladium fell 0.9% and 2.3%, respectively.

At the Comex close: December gold dropped $10.30 to $1,216.60; September silver tumbled 67 cents to $17.78; October platinum shed $12.20 to $1,337.30; December palladium fell $19.05 to $812.35 an ounce.




September 18: Gold drops 0.7% on rising risk appetite

Source: Dr. Bill Musgrave, American Gold Exchange

Austin -- Gold dropped 0.7%, closing at an eight-month low just under $1,227, after improving jobless data boosted risk appetite, reducing safe-haven demand.

The Dow and S&P 500 added 0.6% and 0.5%, respectively, closing at new record highs after first-time claims for unemployment benefits fell to a two-month low, boosting economic optimism. The positive jobless news trumped a fall-off in factory activity in the Fed's mid-Atlantic region this month, and reports that U.S. housing starts dropped in August.

Gold was also pressured by yesterday's Fed policy statement raising its forecast for interest rates to 1.375% from 1.125% by the end of next year. While the central bank reiterated its pledge to hold rates near zero for a "considerable time" after the end of quantitative easing in October, the higher forecast implies that rates will rise more steeply when the increases begin. Higher interest rates support a stronger dollar, weighing on gold and other commodities denominated in the currency for international trade by making them more expensive to foreign buyers.

The other precious metals fell harder than gold, with silver sliding 1.1% while platinum and palladium both lost 0.9%.

At the Comex close: December gold dropped $9 to $1,226.90; December silver 20 cents to $18.45; October platinum fell $12.70 to $1,349.50; and December palladium fell $7.40 to $831.40 an ounce.




September 17: Gold slips on Fed rate estimate

Source: Dr. Bill Musgrave, American Gold Exchange

Austin -- Gold slipped 80 cents to close just under $1,236 before dropping an additional $5 per ounce to $1,231 after hours following the release of a mixed policy statement at the conclusion of this week's FOMC meeting.

The Fed reiterated that interest rates will be held near zero for a "considerable time" after the bond-buying program known as quantitative easing ends in October. Traders were concerned that any change in this language could signal a new disposition to raise rates sooner than expected, which would weigh on the gold price by boosting the dollar. That no change was made to this phrasing was widely viewed as a dovish sign.

As in its July statement, the Fed also noted that the economy is expanding at a "moderate" rate and the improving job market belies "significant underutilization" of labor resources. In a potentially significant change, the new statement cited inflation as "running below the committee's longer-term objective," whereas in July it said inflation was "somewhat closer" to the goal. Coincidentally, data released today showed that consumer prices fell in August for the first time in sixteen months. Low inflation gives the Fed leeway to keep interest rates lower for longer.

However, the Fed also conveyed a more hawkish tone by raising its median estimate for the federal funds rate at the end of 2015 from 1.125% to 1.375%, meaning steeper increases once they begin. This change in forecast lifted the dollar against most major rivals, pressuring gold and other commodities denominated in it for international trade by making them more expensive to overseas buyers.

The other precious metals tracked lower with gold. September silver lost 9 cents to $18.75; October platinum gave up $9.50 to $1,357.80; and December palladium lost $4.95 to $836.60 per ounce.




September 16: Gold rises on flat PPI, China easing

Source: Dr. Bill Musgrave, American Gold Exchange

Austin -- Gold gained for a second session, edging up 0.2% to close near $1,237, as flat wholesale inflation reduced pressure on the Fed to raise interest rates and weighed on the dollar. Reports that China will supply $80 billion in broad-based monetary stimulus through its five biggest banks also supported the metal by raising inflation risk in the world's second-largest economy.

Falling food and energy prices kept U.S. producer prices flat in August, according to the Labor Department, falling short of forecasts and July's meager 0.1% rise. Released as the FOMCn begins its two-day September meeting, the data is expected to give the Fed additional leeway in its forward guidance for tightening monetary policy. Most economists expect the first rate increase to occur in mid-2015.

The World Gold Council reported today that China is projected to increase its gold reserves for the first time since 2009, following a trend within emerging economies to offset currency risk by holding proportionately more gold. Whereas China has the biggest foreign-exchange holdings in the world, merely 1.1% is held in gold, according to the most recent official figures. The U.S. and Germany, by contrast, maintain roughly 70% in the metal.

The dollar fell against most rivals in the wake of the August PPI data, supporting precious metals and other commodities denominated in it for international trade. Silver edged up slightly while platinum and palladium picked up 0.3% and 0.9%, respectively.

At the Comex close: December gold gained $1.60 to $1,236.70; December silver added a cent, to $18.66; October platinum rose $3.80 to $1,367.30; and December palladium picked up $7.30 to $844.20 an ounce.




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