Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gold fell 0.6% to close under $1,217, its lowest finish since June, as upbeat economic data and hawkish statements from Fed Chair Janet Yellen boosted the dollar, undercutting demand for alternative stores of value.

The Consumer Price Index rose 0.4% last month, posting a year-over-year rise of 1.6%, the biggest in two years, behind rising gasoline costs. Construction starts for new homes rose 25% to a nine-year highin October.

The dollar gained 0.6% against major rivals as traders speculated that the economic news supports the case for a rate hike from the Fed in December. Higher rates are bullish for the dollar because they attract forex trade in search of higher yields, in turn pressuring gold and other commodities by making them more expensive to users of other currencies.

Janet Yellen told Congress today that the case for higher interest rates has "continued to strengthen" and an increase could come "relatively soon," if incoming data show further progress toward meeting FOMC goals. Gold quickly plunged into losses on Yellen's statement after rising as high as $1,231 earlier in the session.

The other precious metals were mostly lower, with silver and platinum dropping 0.9% and 0.2% while outlier palladium, more directly tied to industry, picked up 1.5%

At the Comex close: December gold fell $7 to $1,216.90; December silver dropped 16 cents to $16.77; January platinum lost $1.40 to $945.10; and December palladium picked up $10.85 to $729.65 an ounce.