Gold News & Info

Source: Bill Musgrave, American Gold Exchange

Austin— Gold dipped 0.3% to settle under $1,113 as the dollar crept slightly higher on mixed U.S. data, dimming demand for alternative assets. The metal still finished with a weekly gain of 1.7%, its biggest in two months, as investors sought protection from China's deep devaluation of the yuan.

Driven by a 10.6% surge in auto production, U.S. industrial output rose by 0.6% in July, the most in eight months and slightly more than forecasts. Consumer sentiment slipped last month but remains relatively high at just under 93 on the University of Michigan index.

Combined with yesterday's upbeat retail sales report, the new data raised speculation that the Fed may be inclined to increase interest rates at their September meeting, causing the dollar to rebound from early session losses to gain nearly 0.2% on the day. A stronger dollar pressures gold and other commodities by making them more expensive overseas.

Stubbornly low inflation might be an impediment to a September hike, however. Growth in producer prices slowed in July, falling to 0.2% from 0.4% in June, the Labor Department reported today. The influential consumer price index is also expected to show less inflation when released next week. And with China's devaluation of its currency by 3% this week, global deflationary pressures are expected to build in coming months as other nations follow suit to support their exports.

The other precious metals were mixed on the day but higher for the week. Silver dropped 1.2% to close the week with a 2.4% gain. Platinum edged down 0.1% today but gained 3% this week. Palladium added 0.3% today for a weekly gain of 3.4%.

At the Comex close: December gold slipped $2.90 to $1,112.70; September silver dropped 19 cents to 15.21; October platinum edged down $1 to $994; and September palladium gained $1.80 to $617.50 an ounce.