Gold settles 1% higher as commodities rise; silver rallies

Getty Images

Gold settled 1 percent higher on Wednesday, as broad gains in the commodities complex and signs of simmering inflation lifted bullion after the previous day's drop.

Silver outperformed gold and was set for its largest six-day consecutive rally in nearly two years, as economic hopes boosted silver's 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 percent to $1,334 per ounce. On Tuesday, gold ended 1 percent lower as strong U.S. retail sales data boosted the dollar. U.S. gold futures for December delivery closed $12.90 higher at $1,333.40 an ounce.

For more information on precious metals, please click here.