Gold News & Info

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.