Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold fell 0.9% to close under $1,245 as the dollar jumped on rising wholesale inflation and oil plunged on trade-war jitters, reducing demand for alternative stores of value.

US producer prices jumped 0.3% in June, more than expected, pushing annual wholesale inflation up to 3.4%, the highest since 2011. Core producer prices, factoring out volatile food and energy, rose a modest 0.1% to an annual rate of 2.7%. The higher PPI numbers predate the imposition of new tariffs on imports from China, which will add to inflationary pressure.

The dollar rallied 0.6% as traders speculated that inflation will induce the Fed to raise interest rates more frequently, perhaps once each quarter. Higher rates boost the buck by attracting foreign exchange investment seeking higher yields, pressure gold and other commodities priced in dollars by making them more expensive overseas.

The Trump administration upped the trade-war ante by announcing a 10% tariff on another $200 billion in Chinese goods. Tariffs of 25% on $34 billion in goods were slapped on China last week, prompting retaliatory action by Beijing.

West Texas Intermediate crude oil plunged 4.2% to under $71 a barrel, the biggest daily drop in two years, as traders worried that the US-China trade conflict will curtail demand while Libyan production returns to normal. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were also lower, with silver tumbling 1.7% while platinum lost 1.3% and palladium edged down less than 0.1%.

At the Comex close: August gold dropped $11 to $1,244.40; September silver lost 27 cents to $15.82; October platinum slid $11.20 to $835; and September palladium dipped 60 cents to $937 an ounce.