Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold fell 1.2% to close under $1,132 as more weak data from China caused a sell-off in stocks, driving traders to cash-in liquid assets to cover losses. Higher U.S. consumer spending and hawkish comments about interest rates from a prominent Fed member also weighed on the metal.

China's industrial profits plunged nearly 9% in August compared to a year ago, adding to worries that the world's second-largest economy is mired in a serious slowdown. The IMF is expected to cut its global growth forecast this week because of deepening weakness in China and emerging markets.

Equities fell sharply after the China data, with the Dow losing 1.9% and the Global Dow nearly 2.1%. Nasdaq was hit even harder, dropping around 3% while healthcare and biotech stocks took the brunt of the carnage, plunging nearly 5% and 7%, respectively. Gold and silver were swept up in the selling as traders sought cash to cover losses.

Gold was further pressured by reports that U.S. consumer spending rose 0.4% in August, adding to speculation that the Fed may raise interest rates this year after all. New York Fed President William Dudley said today that the economy is making "a pretty strong case for liftoff" and the first hike could come as early as October.

The other precious metals were also down, with silver plunging 3.8% while platinum and palladium dropped 3% and 2.4%, respectively.

At the Comex close: December gold fell $13.90 to $1,131.70; December silver plunged 57 cents to $14.54; October platinum lost $28.60 to $922.50; and December palladium shed $15.75 to $651.85 an ounce.