Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold gained for the third straight session, climbing 0.9% to close above $1,104 after a prominent Fed official said inflation remains too low to hike interest rates in September, pressuring the dollar and boosting demand for alternative assets.

Vice Chair Stanley Fisher, the Fed's number two official, declared today that the central bank is unlikely to raise interest rates until inflation returns to normal levels. While progress in the labor market is encouraging, Fisher told Bloomberg TV "inflation is very low" both at home and abroad, something that "bothers" the Fed.

The Fed's preferred metric for U.S. inflation, the PCE price index, shows merely 1.3% growth over 12 months while the target is 2%, a level not reached since April 2012. In fact, Fisher added, if the Fed were focused only inflation, it would have to be even more accommodative, not less.

The dollar fell on Fisher's comments while stocks and commodities surged, with the Dow adding 1.4% and oil jumping 2%. Silver gained 3.2% while platinum and palladium gained 2.9% and 1.6%, respectively. Low rates pressure the dollar, which supports gold and other commodities denominated in it for international trade by making them less expensive to foreign buyers.

At the Comex close: December gold gained $10 to $1,104.10; September silver jumped 47 cents to 15. 29; October platinum rose $27.60 to $989.80; and September palladium added $9.30, or to $606.20 an ounce.