Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold slid 0.8% to close at a two-month low of $1,316.50 after strong consumer data and hawkish Fed comments rallied the dollar, diminishing appetite for alternative stores of value.

Consumer confidence rose to nearly a one-year high in August, according to the Conference Board, boosted by growing confidence in the labor market. Short-term expectations for improving business conditions and personal income also rose.

Fed Vice Chair Stanley Fischer said today that economy is "very close to full employment," embellishing recent remarks that that the Fed may raise rates twice this year, perhaps starting as soon as next month. While he did not comment on the specific timing, Fischer reiterated the central bank's mantra that rate hikes will depend on incoming data. Friday's release of the nonfarm payrolls report should give further clues.

Two regional Fed presidents are pushing back against Fischer's viewpoint, however. Dennis Lockhart of Atlanta said he "wouldn't take [Fischer's] position" today, while James Bullard of St. Louis said two rate hikes does not fit his view. CME FedWatch places the odds of a hike coming in 2016 at around 42%.

The dollar jumped 0.6% on the confidence data and Fischer comments, pressuring gold and other commodities priced in it for international trade by making them more expensive in other currencies.

The other precious metals fell harder, with silver losing 1% while platinum and palladium dropped 2.3% and 3%, respectively.

At the Comex close: December gold slid $10.60 to $1,316.50; December silver lost nearly 19 cents to $18.67; October platinum fell $24.50 to $1,056.60; and December palladium dropped $21.05 to $678.20 an ounce.