Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.6% to close above $1,233 after a stiff rise in consumer prices spurred demand for inflation hedges, bringing bargain-hunters into the market after four losing sessions.

Inflation surged in January by the most in four years, with the Consumer Price Index rising by 0.6%, doubling most forecasts. Higher gasoline prices were the primary driver, though the cost of housing and health care also rose. Wage growth did not keep up with prices, however, as real average hourly earnings fell by 0.5%.

U.S. retail sales also beat expectations, rising by 0.4% despite the biggest drop in new car sales in then months. But manufacturing rose at a sleepy 0.2% after a similar rise in December.

Stocks extended their rallies on the upbeat data, with the Dow and S&P 500 both adding around 0.5% to reach new record highs.

The dollar stumbled between gains and losses to close nearly flat as traders digested Fed Chair Janet Yellen's second day of Congressional testimony on monetary policy. When asked about coming rates hikes Yellen refused to commit to a timetable. Despite some hawkish rhetoric from Fed members recently, many analysts still forecast two hikes this year rather that the three mentioned by the Fed in December.

The other precious metals also rose, with silver adding 0.4% while platinum and palladium picked up 0.8% and 0.7%, respectively.

At the Comex close: April gold gained $7.70 to $1,233.10; March silver added 7 cents, to $17.96; April platinum climbed $7.70 to $1,009.90; and March picked up $5.30, to $786.20 an ounce.