Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

Austin— Gold extended its losing streak to eight sessions, slipping 0.5% to close near $1,203, as lower oil and higher expectations of a rate hike dulled appetite for alternative stores of value.

Oil fell another 2.2%, adding to yesterday's 5% plunge, as rising U.S. production undermined efforts by OPEC to reduce the global supply glut. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

Gold prices came under pressure last week after several prominent Fed members including Fed chair Janet Yellen signaled that interest rates are likely to rise this month, given momentum in the economy. Upbeat data have also supported a March hike. Higher rates typically boost the dollar by attracting foreign exchange investment seeking higher yield, and a rising dollar weighs on gold by making it more expensive overseas.

In a development that is likely to support gold in the longer term, global inflation appears to be gathering momentum. U.S. import prices surged in February for the third straight month behind more expensive industrial and consumer goods. China's producer price inflation jumped 7.8% to a nine-year high because of much higher commodity prices. And the ECB said today that the threat of deflation has passed in the Eurozone.

The other precious metals were also lower, with silver dropping 1.5% while platinum and palladium fell 1.3% and 2.9%, respectively.

At the Comex close: April gold fell $6.20 to $1,203.20; May silver lost 26 cents to $17.04; April platinum dropped $12.30 to $937.20; and June palladium shed $22.35 to $748.05 an ounce.