Daily Gold Update

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold rose 0.8%, tallying gains of nearly 6% over the past seven sessions, and the dollar fell ahead of tomorrow's semi-annual Congressional testimony on monetary policy by Ben Bernanke. The Fed Chair is widely expected to reiterate last week's assertion that the central bank needs to keep stimulus in place because of persistent unemployment and low inflation. His reassurance that interest rates will remain near zero for a long time has pressured the dollar over the past week, a trend that continued today. A weaker dollar supports higher gold prices because gold is denominated dollar internationally, making it less expensive for holders of other currencies. The other metals followed gold higher, with silver adding 0.6%, platinum 0.8%, and palladium 0.5%.

At the Comex close: August gold gained $10.60 to $1,294.10; September silver picked up 12 cents to $19.96; October platinum climbed $10.60 to $1,432; and September palladium added $3.85, to $736 an ounce.

Gold surrendered some of the session's gains after June's CPI report showed consumer inflation rising by 0.5%, the most in four months. Most of the rise came from higher energy prices. Excluding food and energy, prices rose by just 0.2% annually, leaving the Fed room to continue easing for now. A number of policy makers have voiced concerns that inflation is too low, risking deflation. Earlier this week, St. Louis Fed President James Bullard recommended increasing stimulus if inflation continues to fall.