Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold edged up less than 0.1% to close near $1,268 as crude oil rallied, supporting demand for alternative assets. The metal finished the week 1% higher for its second consecutive weekly win after a stronger-than-expected CPI boosted demand for inflation hedges.

Oil gained 0.5% to almost $51 a barrel, notching a 1% rise this week, on growing confidence that Russia will join OPEC in curtailing production. OPEC Secretary General Mohammad Barkindo said earlier this week that Putin has offered reassurances of Russia's commitment to stabilizing the oil market. Gold often trades in sympathy with crude as a hedge against energy-inflation.

The metal's gains were capped, however, as the dollar rallied to an eight-month high against major rivals. The European Central Bank signaled the possibility of deeper monetary easing in December, hammering the euro this week. A stronger dollar pressures gold by making it more expensive overseas.

Demand for gold as an inflation hedge helped push it to a two-week high near $1,270 midweek after the CPI showed consumer prices rose 0.3% in September for a 12-month increase of 1.5%, the most in two years.

The gold price has also gained support from soft housing data, which caused traders to rethink the timing of the next rate increase from the Fed. New-home construction tumbled to an 18-month low in September and homebuilder sentiment fell in October. In addition, the Fed's Beige Book showed only "modest or moderate" growth in most regions from late August to early October. CME Fedwatch lowered the odds of a December hike from around 75% to less than 67% on the data.

The other precious metals finished lower. Silver dropped 0.3% today for 0.3% weekly rise. Platinum also slid 0.3% today but lost 0.8% this week. Palladium tumble 1.9% today and 4.3% this week.

At the Comex close: December gold picked up 20 cents to $1,267.70; December silver slipped almost 6 cents to $17.49; January platinum dropped $3.10 to $932.30; December palladium lost $12.10 to $620.75 an ounce.