Gold News & Info

Source: Bill Musgrave, American Gold Exchange

Austin— Gold rallied for a fourth straight day, jumping 1.2% to close under $1,180, as weak inflation and retailing data undermined the case for higher interest rates, weakening the dollar and boosting demand for alternative stores of value. The metal then surged as high as $1,190 in electronic trade after the Fed's Beige Book was released, revealing a further slowdown in the economy.

The Labor Department reported wholesale inflation fell 0.5% in September, with the price of goods falling 1.2% while services fell 0.4%. The core PPI excluding volatile food and energy prices fell 0.3%. Weak inflation is one reason the Fed has given for postponing rate increases

In a separate report, U.S, retail sales were virtually flat in September rising a scant 0.1% after logging no growth at all in August. The slowdown suggests that consumers are becoming more careful, perhaps spooked the volatile stock markets and the global slowdown. The Fed's Beige Book signaled softer business activity, with the strong dollar cited an impediment to growth.

The dollar fell almost 1% in response to the softer data as traders speculated that the Fed will have to hold rates steady until next year. A softer dollar supports gold and other commodities denominated in it for international trade by making them less expensive overseas.

The other precious metals also finished higher, with silver gaining 1.3% while platinum and palladium added 0.3% and 2.3%, respectively.

At the Comex close: December gold gained $14.40 to $1,179.80; December silver picked up 21 cents to $16.12; January platinum added $2.80 to $995.40; and December palladium climbed $15.50 to $700.85 an ounce.