Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold surged 1.2% to close above $1,753 after signs of moderating inflation reduced pressure on the Fed to taper monetary stimulus, lowering yields and the dollar while lifting alternative assets. It was the metal's biggest one-day climb in two weeks.

The Consumer Price Index rose 0.5% in July, down from 0.9% in June, to keep the 12-month inflation rate at 5.4% for a second month. Factoring out volatile food and energy costs, the core CPI rose 0.3%, less than forecast, to bring the 12-month rate down to 4.3% from 4.5% the month before.

Although the annualized CPI remains at a 20-year high, the monthly decline appears to jibe with the Fed's mantra that the recent spike in inflation is "largely transitory" and will moderate as supply-chain bottlenecks open.

Benchmark 10-year Treasury yields pulled back after the mild inflation data as bond traders speculated that the Fed may be less inclined to taper prematurely its bond-buying program known quantitative easing. Falling yields support gold by reducing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar also pulled back, dropping 0.2% against major rivals for the same reasons. A weaker dollar supports gold and other commodities priced in it for global trade by making them less expensive in other currencies.

Gold thrives in an environment of high inflation and low interest rates as investors seek assets that preserve purchasing power without having to forego the returns that would otherwise accrue from higher bond yields.

The other precious metals were mostly higher, with silver and platinum rising 0.4% and 2.9%, respectively, while palladium fell 0.6%.

At the Comex close: December gold gained $21.60 to $1,753.30; September silver added a dime, to $23.49; October platinum climbed $28.60 to $1,015.60; and September palladium dropped $17.20 to $2,632.80 an ounce.