Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold fell 1% to close above $1,286 after strong GDP data and hawkish testimony from Janet Yellen boosted the likelihood of further rate hikes from the Fed.

In her final speech to Congress before stepping down as Fed Chair in February, Yellen said the economy is strong and will require gradual increases in interest rates to prevent a "boom-bust" cycle. While calling persistently low inflation "puzzling" and "extremely disappointing," she expressed confidence that it will eventually rise to the Fed's 2% target.

Yellen's optimism was taken as a strong signal that the Fed will raise rates by another quarter-point when it meets later this month. Higher rates tend to lift the dollar by attracting foreign exchange investment seeking higher yield, pressuring gold and other commodities priced in it for global trade.

New data releases also support another rate hike. Third-quarter GDP was revised higher to 3.3%, from 3%, marking the fastest growth in three years. And the Fed's Beige Book, an anecdotal report on the health of the economy, saw rising inflation pressure and "a slight improvement in the outlook" for growth in its 12 districts.

Further pressuring gold, oil fell more than 1% on doubts about Russia's willingness to support an extension of production cuts when OPEC meets this week in Vienna. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals also finished sharply lower, with silver dropping 2.1% while platinum and palladium lost 1.2% each.

At the Comex close: February gold fell $13 to $1,286.20; March silver lost 36 cents to $16.56; January platinum slid $11.60 to $941.20; and March palladium retreated by $12.15 to $1,008.50 an ounce.