Gold News & Info

Source: Bill Musgrave, American Gold Exchange

Austin— Extending its winning streak for five sessions, gold added another 0.7% to close at a four-month high of $1,187.50 as falling consumer inflation and weak regional manufacturing data lowered the odds of a rate hike from the Fed this year. After surging more than 6% this month, gold is now up 0.3% for the year.

Consumer prices fell by a seasonally-adjusted 0.2% in September, the Labor Department reported today, only slightly less than the 0.5% decline in wholesale prices. The CPI has now posted zero increase over the past year. Stubbornly low inflation has been cited repeatedly by the Fed as a reason to delay raising interest rates.

The New York and Philadelphia Fed regions reported sharp slowdowns in manufacturing, painting an ugly picture of business conditions in the Northeast. Philadelphia fell into the negative for the second straight month while New York has contracted in each of the past three months.

This pattern of weakness has been repeating nationwide, with the ISM manufacturing index dropping near contraction last month and the Fed's Beige Book reporting that falling overseas demand and the strong dollar are stifling U.S. factories.

The dollar initially fell on the dismal data but then recovered after weekly U.S. jobless claims fell to the lowest level since the early 1970s. The buck remains on course for a weekly loss�the fourth in the last five weeks�because of growing speculation that the Fed will be unable to raise rates until next year. A falling dollar support gold and other commodities denominated in it for international trade by making them less expensive for users of other currencies.

The other precious metals all finished higher, with silver gaining 0.3% while platinum and palladium added 1.2% and 0.6%, respectively.

At the Comex close: December gold gained $7.70 to $1,187.50; December silver rose nearly 5 cents to $16.16; January platinum jumped $11.60 to $1,007; and December palladium picked up $4.15 to $705 an ounce.