Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.7% to close above $1,109 after soft U.S. inflation data weakened that dollar and boosted demand for alternative stores of value.

The BLS reported today that import prices fell by 1.8% in August, the biggest decline in seven months. Pressured by tumbling oil prices and a strong dollar, prices for imported goods have fallen by 11.4% over the past year for the largest retreat since 2009. Meanwhile, prices for U.S. exports fell 1.4%, damaging profits for domestic firms doing business overseas.

The dollar retreated against major rivals as traders speculated that the weak inflation numbers will discourage the Fed from raising rates next week. Slower growth in Europe and Asia, combined with growing deflationary trends in much of the world, has been a major concern of the U.S. central bank as it weighs when to begin tightening monetary policy.

The other precious metals were mostly higher, with silver adding 0.5% while palladium jumped 2.5% and platinum finished unchanged.

At the Comex close: December gold gained $7.30 to $1,109.30; December silver added 7 cents, to $14.65; October platinum finished flat at $981.20; and December palladium jumped $14.55, to $592.50 an ounce.