Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold edged down 0.1% to close under $1,947 as yields and the dollar rose on a mild increase in wholesale inflation. The metal finished the week with a 1.5% loss, its biggest weekly decline since late June, under pressure from rising yields and the dollar.

The US producer price index rose 0.3% in July, its biggest rise since January, to push the 12-month increase up to 0.8%. The so-called core PPI, factoring out food and energy, also rose 0.2% for the month, keeping the 12-month rate to 2.7%, as it was in June.

While the headline print was slightly above forecasts, like the consumer price index released yesterday, the overall trend was viewed as consistent with moderating inflation. Nonetheless, San Francisco Fed chief Mary Daly said today that the Fed "has more work to do" in bringing inflation back to 2%.

Fed fund futures now project an 88% likelihood that the Fed will hold rates unchanged at its September meeting, down from 91% yesterday.

Benchmark 10-year Treasury yields rose to 4.15% on the mildly elevated PPI and hawkish Fed speak, creating headwinds for gold by increasing the opportunity cost for holding it instead of bonds.

The dollar picked up 0.3% against major rivals, further weighing on gold and other commodities by making them more expensive in other currencies. The buck rallied 2.9% for the week.

The other precious metals were mostly lower for the day and week. Silver slipped 0.3% for a weekly loss of 4.1%. Platinum dipped less than 0.1% for the day and 1,5% for the week. Outlier palladium picked up 0.3% to notch a weekly win of 3.5%.

At the Comex close: December gold dipped $2.30 to $1,946.60; September silver slipped 8 cents to $22.74; October platinum eased by 20 cents to $914.60; and September palladium added $3.60, to $1,309.10 an ounce.