Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold rolled back 0.9% to close under $1,293 as upbeat U.S. data and rising consumer inflation bolstered the view that the Fed will phase out quantitative easing this year. First-time jobless claims fell to a seven-year low last week, supporting prospects for an improving labor market. Factory-output in the New York region expanded by the most in four years, suggesting stronger growth, but that news was tempered by reports that Philadelphia Fed region retreated last month.

The April consumer price index rose 0.3% for its biggest increase since June, posting an annual inflation rate of 2%. While still at the low end of the Fed's target range, rising inflation is expected to encourage the continued tapering of asset purchases until QE ends sometime this fall�despite Fed Chair Janet Yellen's statements last week that the economy still needs a lot of support. Tantamount to printing money, QE has boosted prices for gold and equities by undermining the value of the dollar and laying the groundwork for higher long-term inflation.

Stocks stumbled on slower growth in the eurozone and the prospect of diminishing stimulus in the U.S., with the Dow sinking 1%, the most in a month. The other precious metals outpaced gold's declines, with silver falling 1.5% while platinum and palladium dropped 1.1% and 2%, respectively.

At the Comex close: June gold fell $12.30 to $1,293.60; July silver dropped 29 cents to $19.48; July platinum shed $15.80 to $1,469.90; and June palladium tumbled $16.70 to $812.10 an ounce.