Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold gained 1% to close at $1,134 as bargain-hunters returned to the market and prospects dimmed for a September rate hike. The metal still finished the week 2.2% lower, surrendering roughly half of last week's 4.2% rise after upbeat U.S. economic data caused a rebound in stocks and reduced safe-haven demand.

The Commerce Department said today that consumer spending ticked up 0.3% in July, led by auto sales, and was revised slightly higher in June. Following yesterday's GDP revision to 3.7% in the second quarter, up from the previous estimate of 2.4%, the spending data suggest the economy is on fairly solid footing, possibly putting a September rate hike back into play.

On the negative side of the ledger, however, core inflation weakened in July, with the Fed's preferred gauge rising by an annualized 1.2%, down from 1.3% in June�still well below the target 2%. And consumer sentiment slipped this month as Americans became more concerned about market volatility and slower growth overseas.

With economists meeting at Jackson Hole to discuss global monetary policies, several Fed members who are eager to raise rates acknowledged the turmoil in global markets may delay the first hike despite the relatively better U.S. economy. Responding to the soft inflation data, Minnestoa's Narayana Kocherlakota even called for additional monetary easing.

The other precious metals, too, were higher for the day and lower the week. Silver added 0.8% for a weekly loss of 5%. Platinum picked up 1.6% but lost still lost 0.5% on the week. Palladium jumped 3.7% today but fell 2.4% this week.

At the Comex close: December gold gained $11.40 to $1,134; September silver added 12 cents, to $14.54; October platinum picked up $15.70 to $1,021.70; and September palladium jumped $20.95, or 3.7%, to $589.55 an ounce to lose about 2.4% on the week.