Daily Gold Update

Source: MarketWatch

New York— Gold futures fell Tuesday as the metal's appeal as a hedge against inflation declined after the U.S. reported a record drop in producer prices and inflation pressures in the U.K. eased much more than expected. Gold for December delivery fell $9.30, or 1.3%, to $732.70 an ounce on the Comex division of the New York Mercantile Exchange. It closed slightly lower in the previous session.

U.S. producer prices index fell a record 2.8% in October from a month ago, the most since 1947, the Labor Department reported Tuesday. The U.K.'s Office for National Statistics said consumer price index fell 0.2% in the same month. Market expectations had been an increase of 0.1%. The data indicated that deflation is displacing inflation as a major concern for investors and policy makers, analysts said. "It now seems that there is a strong likelihood of deflation," said Ben Read, managing economist at the Center for Economic and Business Research. See full story.