Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold jumped 1% to close at a two-year high near 1,373 as weak data has dimmed prospects for a rate hike from the Fed, pressuring the dollar and boosting demand for alternative stores of value. Silver also climbed 1% to close at $20.70.

Inflation was nearly flat again in June, with the PCE index, the Fed's preferred measure, inching up 0.1% from May and gaining just 0.9% year-over-year, far less than the central bank's target 2%. Consumer spending added 0.4% but failed to impress Wall Street, with the Dow dropping 0.5% and the Global Dow 0.7%.

The soft inflation comes on the heels of last week's surprising poor GDP report, which showed growth of just 1.2% in the second quarter, and this week's data showing weaker manufacturing and reduced business investment.

The dollar fell 0.7% to a one-month against a basket of major rivals as traders speculate that the Fed will not raise rates until well into next year because of the stumbling U.S. economy and post-Brexit risk of global growth. Speaking today in Beijing, Dallas Fed President Robert Kaplan joined other U.S. policymakers in urging patience in hiking rates because of rising global risks. Low rates weaken the dollar, which it turn supports gold and other commodities denominated in it for international trade by making them less expensive overseas.

The other precious metals finished higher. Platinum added 0.8% while palladium picked up 0.2%.

At the Comex close: December gold jumped $13 to $1,372.60; Silver climbed 20 cents to $20.70; October platinum picked up $8.80 to $1,1172.10; and September palladium added $1.45, to $717.70 an ounce.