Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold fell another 0.5% to close under $1,763 as hawkish Fed talk and economic weakness in Asia and Europe further rallied the dollar, undermining alternative stores of value. The metal's fifth straight down session left it with a weekly loss of 2.9%.

Richmond Fed President Thomas Barkin added his voice to the choir of Fed officials vowing in recent days to remain aggressive in raising interest rates. He reiterated that the central bank will "do whatever it takes" to bring inflation under control.

Earlier this week, St. Louis Fed President James Bullard declared his preference for a third straight hike of 75 basis points in September. Neel Kashkari of the Minneapolis Fed urged central bank to curb inflation despite the possibility of triggering a recession.

Even moderate Mary Daly of the San Francisco Fed left the door open another 75-point hike next month.

The dollar rallied sharply this week on the aggressive Fed talk, adding another 0.6% to a five-week high and notching a weekly rise of 2.3%, the biggest in more than two years. A stronger dollar weighs on gold and other commodities by making them more expensive in other currencies, reducing demand overseas.

Further fueling the greenback's rise, other major economies are struggling, which weighs on their currencies. China's central bank cut rates sharply because of slowing growth, Russia's economy shrank 4% in Q2, and inflation in the UK topped 10% last month.

The eurozone is on the brink of recession, facing a Russia-induced energy crisis that pushed producer prices a record 37% higher in Germany in July.

Benchmark 10-year Treasury yields pushed back up near 3% of the increasingly hawkish rate view, pressuring gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The other precious metals were also lower for the day and week. Silver fell 2% for a weekly loss of 7.9%, its biggest since January. Platinum dropped 1.9% today and 7.4% this week. Palladium slipped 0.4% to post a weekly loss of 4%.

At the Comex close: December gold fell $8.30 to $1,762.90; September silver slid 39 cents to $19.07; October platinum shed $16.90 to $888; and September palladium dropped $18 to $2,131.40 an ounce.