Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold was nearly flat, edging down 0.1% to close at $1,957 as most markets treaded water ahead of tomorrow's release of consumer inflation data.

The consumer price index for July is widely expected to show inflation picked up 0.2% for the month to lift the 12-month rate to 3.3% from 3% in June. While gold is widely used as a hedge against inflation, a stronger-than-expected print could nudge the Fed toward another rate hike in September, which could weigh on the metal.

Fed fund futures traders currently put the odds of a September hike at around 13%. But Fed officials have been mixed recently on whether another hike is in the cards.

Fed Governor Michelle Bowman said earlier this week that "additional rate increases will likely be needed" to put inflation on the path to "the 2% target." Philly Fed chief Patrick Harker, on the other hand, said yesterday that "we may be at the point where we can be patient and hold rates steady." The New York Fed's John Williams said he's on the fence, awaiting data.

Meanwhile, China has officially entered in deflation, with consumer prices falling for the first time in two years in July.

Benchmark 10-year Treasury yields ticked slightly lower as investors continued to hedge against a slowing global economy by purchasing US government debt. The dollar was little-changed as traders await the CPI report for direction on interest rates.

The other precious metals were also lower. Silver slid 0.4% while platinum and palladium each dropped 0.6%.

At the Comex close: December gold dipped $2.40 to $1,957; September silver shed a nickel to $22.77; October platinum lost $5.10 to $899; and September palladium dropped $7.60 to $1,210 an ounce.