Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold slipped 0.5% to close under $1,678 as hotter-than-expected wholesale inflation and hawkish Fed minutes reinforced the likelihood of higher interest rates ahead, boosting the dollar and undercutting alternative stores of value.

The Producer Price Index rose 0.4% in September, twice most forecasts, for its first increase in three months. The 12-month rate dipped slightly to 8.5% from 8.7% in August, mostly on lower gasoline prices. Excluding volatile food and energy cost, the core PPI was flat at 5.6%.

Tomorrow's release of Consumer Price index data is widely expected to reflect higher inflation at the consumer level, too, and signal that the Fed remains behind the curve in controlling the strongest inflation in 40 years.

The minutes from the Fed's September meeting on monetary policy, released today, emphasized that the central bankers see inflation as the greatest risk to the economy, which likely means another jumbo rate hike when they meet again in early November.

The dollar rose after the PPI data, pressuring gold and other commodities priced in it for global trade by making them more expensive in other currencies.

The other precious metals were also lower, with silver losing 2.8% while platinum and palladium fell 2% and 0.7%, respectively.

At the Comex close: December gold slipped $8.50 to $1,677.50; December silver dropped 55 cents to $18.94; January platinum shed $18.10 to $881; and December palladium slid $14 to $2,136.40 an ounce.