Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold dipped 0.2% but held above $1,355 as traders took profits from yesterday's 2.1% surge despite strong wholesale inflation and further losses in the dollar.

The Producer Price Index jumped 0.4% in January, driving the 12-month rate for wholesale inflation up to 2.7% in January. The core PPI, stripping out volatile food and energy costs, also rose 0.4%. Following a robust 0.5% rise in January's Consumer Price Index, the PPI numbers signal additional inflationary pressure in the pipeline.

The dollar fell 0.5% against major rivals, extending its losing streak to four sessions as traders shifted into the yen and Swiss franc. Yesterday's reports of declining retail sales and rising consumer inflation may signal an economy nearing the end of its boom cycle, prompting traders to prefer safe-haven currencies.

Other economic data were mixed, with the Philly Fed manufacturing index rising in February while the Empire State index fell.

Returning appetite pressured gold, with equities extending their rebound from recent corrections. All three major US indexes gained for a fifth session, with the Dow and S&P 500 both adding 1.2%.

The other precious metals were mixed, with silver dropping 0.5% while platinum and palladium picked up 0.2% and 0.9%, respectively.

At the Comex close: April gold dipped $2.70 to $1,355.30; March silver slid 8 cents to $16.80; April platinum rose $2 to $1,001.10; and March palladium climbed $9.35 to $1,006.65 an ounce.