Gold Drops Previous Session Gain, Silver Slides 61 Cents

New York gold poked its head out of an eight day dark hole Wednesday only to jump back into it Thursday by dropping its previous day’s gain. Silver and platinum were also daily losers as investors eyed declining oil prices and a strong US dollar.

September crude-oil lost 99 cents from its Wednesday $2.99 gain to close at $115.01 a barrel.

Silver for September lost 61.5 cents to end at $14.23 an ounce.

October platinum fell $27.40 to close at $1,489.10 an ounce.

December gold shed $17 to close at $814.50 an ounce. It reached an earlier low point of $810.

“What started out as a second day of recovery in precious metals quickly turned almost as ugly as any of the heavy liquidation days we had been witnessing since the first of this month," said senior analyst Jon Nadler at Kitco Bullion Dealers.

Although the US dollar came initially under some pressure in the wake of news that home foreclosures rose 55% in July, the euro and the pound found themselves under an even higher degree of distress this morning," said Nadler.

In other economic news Thursday, the Labor Department released the latest CPI figures. Annual inflation jumped 5.6% for its highest level in 17 years — enough to potentially provide the Fed sufficient ammo to combat further increases with an interest rate hike in September.

Gold typically follows oil and moves opposite to the dollar, as a weakened dollar encourages investors to buy gold, also considered a hedge during times of high inflation and economic uncertainty.

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