Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold dipped less than 0.1% to close under $1,220 as wholesale inflation and employment data boosted the dollar, eroding demand for alternative stores of value.

The Producer Price Index measuring wholesale inflation was flat in July, drawing the 12-month rate down to 3.3%. But the core rate, stripping out volatile food and energy costs, rose 0.3% to push the 12-month rate up to 2.8%, just under the record 2.9% notched in March.

Analysts said underlying cost pressures are stronger than the headline numbers indicated, given that the totals were pulled down by a temporary correction of 0.8% in the "trade services" component, which measures profit margins, after a series of large increases.

The cost of housing continued to surge, according to the Corelogic Index, with home prices rising 6.8% in June compared to a one year ago. Home prices are rising at twice the rate of wages despite slowly climbing mortgage rates.

Initial jobless claims fell for the first time in three weeks, signaling that the labor market remains robust.

The dollar gained 0.4% against major rivals as traders responded to the upbeat data. The UK pound continued to slide on fears that the Britain will exit the EU without trade and financial agreements in place. A stronger dollar pressures gold by making them more expensive in other currencies.

The other precious metals finished higher, with silver adding 0.2% while platinum and palladium rose 0.6% and 1.4%, respectively.

At the Comex close: December gold dipped $1.10 to $1,219.90; September silver picked up 3 cents to $15.46; October platinum added $4.60, to $834.10; and September palladium gained $12 to $898.40 an ounce.