Gold News & Info

Source: Bill Musgrave, American Gold Exchange

Austin— Gold fell 0.5% to close at an eight-month low just over $1,147 as upbeat U.S economic data and comments from Fed Chair Janet Yellen raised speculation of an interest rate hike later this year.

The Labor Department reported today that producer prices rose 0.4% in June, more than expected, behind higher costs for energy and other items such as eggs, pharmaceutical preparations, and cigarettes. The increase marks two straight months of higher wholesale inflation following April's decline of 0.4%, lending hope that consumer inflation will begin to climb closer to the Fed's target of 2%.

In separate reports, industrial output picked up 0.3% in June, the biggest rise in seven months; the New York Fed region posted better business conditions; and the Fed's Beige Book, a collection of anecdotal information on the economy, showed rising optimism about economic growth in all twelve Fed regions.

In testimony before Congress today, Yellen reiterated her recent statement that the central bank is on course to raise interest rates at some point this year. She further emphasized that the precise timing of the first hike will be less important than the ensuing pace of tightening, which will be quite gradual.

The dollar rallied after Yellen's comments, pressuring gold and other commodities denominated in it for international trade. Silver dropped 1.7% while platinum and palladium lost 0.7% and 2.2%, respectively.

At the Comex close: August gold fell $6.10 to $1,147.40; September silver dropped 27 cents to $15.05; October platinum slipped $6.70 to $1,021.70; and September palladium lost $14,20 to $642.90 an ounce.