Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gold dipped 40 cents to close at $1,225.40 after hawkish comments from Fed Chair Janet Yellen boosted the dollar, pressuring alternative assets. The metal rebounded into gains after hours, pushing back over $1,230 in electronic trade, on rising inflation data.

In regular testimony before the Senate Banking Committee, Yellen said the economy is moving toward meeting the criteria for normalizing monetary policy, signaling that a rate hike is back on the table for March.

The dollar added 0.3% to reach a four-week high against major rivals after Yellen's testimony. Rising rates boost the dollar by attracting foreign exchange investment seeking higher yields, in turn weighing on gold because the metal is priced in dollars for international trade.

Wholesale inflation jumped by the most in four years in January, with the Producers Price Index for final demand rising 0.6%, propelled by rising costs of energy and raw materials. The higher inflation numbers helped to minimize gold's losses in the regular session and to push it back into gains after hours as investors sought inflation hedges.

The other precious metals finished higher, with silver rising 0.4% while platinum and palladium picked up 0.2% and 0.8%, respectively. All three extended gains in electronic trade after closing.

At the Comex close: April gold edged down by 40 cents to $1,225.40; March silver added 8 cents, to $17.89; April platinum picked up $1.90, to $1,002.20; and March palladium gained $5.95 to $780.90 an ounce.