PRECIOUS-Gold rises 1 pct on commodities rally; silver up too
* Producer prices suggests Fed might not end stimulus early
* Silver posts biggest six-day rally in 2 years
* Gold market ignores another import control by India
* Coming up: US consumer prices, jobless claims Thursday
(Adds comments from fund manager, Fed officials, update market activity) NEW YORK/LONDON, Aug 14 (Reuters) - Gold rose around 1 percent on Wednesday as broad gains in the commodities complex and signs of simmering inflation lifted bullion after the previous day's drop. Silver jumped nearly 2 percent, outperforming gold and notching its largest six-day rally in nearly two years, as economic hopes boosted its industrial demand, analysts said. The Labor Department said that U.S. producer prices were flat in July, which could add to worries at the Federal Reserve that inflation is running too low, indicating the U.S. central bank might not end its stimulus until inflation begins to trend higher. Spot gold rose 1.1 percent to $1,334.84 per ounce by 3:56 p.m. EDT (1906 GMT). On Tuesday, gold ended 1 percent lower as strong U.S. retail sales data boosted the dollar. U.S. Comex gold futures for December delivery settled up $12.90 at $1,333.40 an ounce, with trading volume about 40 percent below its 30-day average, preliminary Reuters data showed. Despite the tame PPI data, traders said that a recent surge in U.S. Treasury bond yields indicates gold's inflation-hedge appeal could be rising. "The bond market is telling us that it's expecting some inflation. That can make me a buyer of gold," said Sean McGillivray, head of asset allocation at Great Pacific Wealth Management. Yields on U.S. Treasuries held near two-year highs on Wednesday. The benchmark 10-year bond yield has soared 67 percent since May on fears that the Fed might unwind its bond-buying program as early as September. As inflation rises, Treasuries investors require a higher yield to compensate for the loss of purchasing power. On Tuesday, Atlanta Fed President Dennis Lockhart said he did not see any signs that disinflation was accelerating, and that the current inflation backdrop could still be consistent with a modest pullback in quantitative easing. "Just a mere mention that there could be some potential inflation has moved gold up today," said Jeffrey Sica, chief investment officer at New Jersey-based Sica Wealth Management, which oversees more than $1 billion in client assets. Another senior Fed official, St. Louis Fed president James Bullard, said on Wednesday low U.S. inflation is worrisome for the country's economy and there is not much evidence it is heading higher, highlighting an issue for the Fed as it weighs tapering bond purchases. The gold market largely ignored news of another tightening measure on physical bullion imports by India, the world's largest gold consumer. The 19-commodity Thomson Reuters-Jefferies CRB index climbed around 0.7 percent, led by gains in precious metals and agricultural commodities. Among other precious metals, silver rose 1.9 percent to $21.81 an ounce, after hitting a two-month high of $21.85. Silver posted its sixth straight session of gains for the first time since January. During that period it has gained 11 percent, its largest six-day rise since October 2011. Platinum was up 0.2 percent to $1,500.74 an ounce, while palladium edged up 16 cents to $736.66 an ounce.
3:56 PM EDT LAST/ NET PCT LOW HIGH CURRENT SETTLE CHNG CHNG VOL US Gold DEC 1333.40 12.90 1.0 1315.10 1335.40 110,496 US Silver SEP 21.787 0.444 2.1 21.265 21.845 50,153 US Plat OCT 1505.20 5.50 0.4 1485.50 1506.40 7,587 US Pall SEP 740.35 1.45 0.2 733.50 741.00 2,915 Gold 1334.84 14.15 1.1 1316.78 1335.80 Silver 21.810 0.400 1.9 21.300 21.850 Platinum 1500.74 3.24 0.2 1488.00 1503.25 Palladium 736.66 0.16 0.0 736.50 739.00 TOTAL MARKET VOLUME 30-D ATM VOLATILITY CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 115,676 192,310 188,574 23.03 0.25 US Silver 61,821 47,154 54,139 28.85 -0.57 US Platinum 7,716 9,073 12,504 21.11 0.00 US Palladium 3,089 3,685 5,297
(Additional reporting by Zhe Sun in London and A. Ananthalakshmi in Singapore; editing by Veronica Brown and Nick Zieminski)