Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold fell 1.4% to close at a five-year low under $1,067 after upbeat inflation and factory data boosted the dollar, reducing demand for alternative stores of value.

The Consumer Price Index rose 0.2% in October, reversing two months of declines and reinforcing expectations that the Fed will raise interest rates in December. Along with slack in the labor markets, persistently weak inflation has been cited by the central bank as a main reason to hold interest rates near zero. Following October's robust payrolls report, the uptick in consumer inflation is likely to give the Fed additional confidence in the economy's ability to withstand a rate increase.

In a separate report, factory output picked up 0.4% after falling for two straight months. Comprising around 12% of GDP, manufacturing has been hammered by slower global growth and the rising dollar, which makes U.S. exports more expensive overseas.

The dollar gained on the better data, pressuring gold and other commodities denominated in it for international trade. The other precious metals also finished lower, with silver sliding 0.4% while platinum and palladium lost 1.2% and 0.9%, respectively.

At the Comex close: December gold fell $15 to $1,068.60; December silver slid 5 cents to $14.17; January platinum lost $10.50 to $855; and December palladium shed $5.05 to $546.50 an ounce.