Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.3% to close above $1,970 ahead of the Fed's decision on interest rates. The metal then extended its rise to $1,976 in electronic trading after the outcome met expectations and signaled no deeper hawkishness in Fed policy.

As universally expected, the Federal Reserve raised its benchmark rate by a quarter-point to a range of 5.25% to 5.5%. It was the eleventh increase in the past 12 meetings, lifting rates to the highest level in 16 years.

The Fed's accompanying policy statement was little changed from previous months, citing the central bankers' commitment to lowering inflation to its target 2% and leaving the door open to additional increases if "additional information" warrants.

In his post-meeting press conference, Fed Chair Jerome Powell reiterated this position, adding that "it is possible we could raise at the September meeting," but also stating that "we could choose to hold steady at that meeting," as well.

Benchmark 10-year Treasury yields retreated sharply after the Fed decision and messaging as traders were both relieved that the tone was not more hawkish and concerned that even this rate increase could push the economy closer to recession.

Falling yields support gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Tracking lower with yields, and for the same reasons, the dollar lost 0.3% against major rivals after the Fed meeting, lifting gold and other commodities by making them less expensive in other currencies.

Reinforcing flights to safety, the CBO forecast that real GDP will grow 0.4% in the second half of the year, averting a recession but just barely. Unemployment is projected at nearly 5% in 2024.

Separately, the housing market came back under pressure in June, with sales of new homes falling 2.5%.

The other precious metals were mixed, with silver adding 0.6% while platinum and palladium fell 0.5% and 2%, respectively, at the close. All three metals perked up in electronic trading after the Fed decision, with silver pushing its gain to 1% while the PMCs cut their losses by around 0.4%.

At the Comex close: August gold gained $6.40 to $1,970.10; September silver rose 15 cents to $24.97; October platinum slid $4.60 to $972; and September palladium declined by $25.30 to $1,255.90 an ounce.