Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold dipped 0.2% to close above $1,343 after hawkish comments about interest rates from another Fed official supported the dollar, cutting into demand for alternative assets.

Speaking in Colorado yesterday, Federal Reserve Vice Chairman Stanley Fischer, a close ally of Fed Chair Janet Yellen, said the economy is "close to our targets" of strong employment and 2% inflation, signaling that the Fed may be moving closer to raising interest rates. His comments echoed New York Fed President William Dudley and San Francisco Fed President John Williams, both of whom said last week that the economy is probably ready for tighter monetary policy.

The dollar firmed after Fischer's remarks fueled speculation that a September rate hike may be back on the table. Further guidance is expected from Yellen when she speaks on Friday at the Jackson Hole conference of global central bankers. Rising rates supports the dollar by encouraging foreign exchange investment seeking higher yield. A stronger dollar typically weighs on gold and other commodities priced in it for international trade.

Gold was further pressured after oil fell 3.5% on profit-taking and growing expectations that Iraq and Nigeria will boost production. Gold often trades in tandem with oil as a hedge against energy-related inflation.

The other precious metals fell harder, with silver and palladium dropping 2.4% while platinum lost 0.9%.

At the Comex close: December gold dipped $2.80 to $1,343.40; September silver dropped 46 cents to $18.86; October platinum lost $10.20 to $1,108.20; and September fell $17.20 to $692.15 an ounce.