Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold gained 0.6% to close at a fresh two-week high near $1,270 as soft U.S. housing data and a tepid Fed Beige Book constrained the dollar and boosted demand for alternative assets.

Construction of new houses tumbled to an 18-month low in September, according to the Commerce Department, as the housing market struggled for sustained momentum. Housing starts were down 9% from August and nearly 12% from a year ago. The data came one day after the National Association of Homebuilders reported falling sentiment among builders in October.

The Fed's Beige Book, an assemblage of anecdotal evidence from the twelve Fed districts, showed a relatively listless economy from late August to early October, with "modest or moderate" growth in most regions and no growth in New York. The survey is indicated signs of wage pressure, adding to the inflation expectations that gave gold a lift earlier in the week after consumer prices rose 0.3% in September.

The dollar treaded water on the subdued data, holding well-under its recent highs.

In a bullish development, gold demand in India is ramping up again, causing local premiums on prices for bullion and jewelry to rise to the highest levels since last January. The world's second-largest gold consumer, India is moving into the wedding and festival season during the fourth quarter, when buying gold is consider auspicious.

The other precious metals were mixed, with silver adding 0.1% while platinum and palladium slid 0.3% and 0.6%, respectively.

At The Comex close: December gold gained $7 to $1,269.90; December silver added nearly 3 cents to $17.66; January platinum slipped $3 to $943.50; and December palladium slid $3.90 to $643.50 an ounce.