Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold lost 0.6% to close below $1,310 as muted U.S. consumer inflation dimmed demand for the metal as an alternative store of value. Gold was also pressured by traders trimming their positions ahead of tomorrow's announcement by the Fed about when and by how much it plans to taper quantitative easing. Most analysts expect a nominal reduction in monthly bond buys, from $85 to $75 billion, starting in the next few weeks. QE supports higher gold prices by increasing the risk of long-term inflation and devaluing the dollar, making gold and other dollar-denominated commodities less expensive to holders of other currencies.

The CPI inched up by just 0.1% in August, down from 0.2% in July, for an annualized rate of merely 1.5%, well below the Fed's 2% target. The low headline inflation number would appear to give the Fed plenty of room to continue QE at its current pace. However, the report showed medical costs and housing rents rising at a much faster rate, indicating inflationary pressures that could make the Fed more comfortable with a decision to trim easing. Silver dropped 1% and platinum fell 1.3% while palladium edged up by 0.1%

At the Comex close: December lost $8.40 to $1,309.40; December silver dropped 23 cents to $21.78; October platinum fell $18.80 to $1,422.40; and December palladium picked up 90 cents to $706.95 an ounce.