Gold News & Info

Source:Bill Musgrave, American Gold Exchange

Austin— Gold fell 1.1% to close at a one-week low under $1,280 as dovish comments from ECB head Mario Draghi weighed on the euro, boosting the dollar and damping demand for alternative stores of value.

As expected, the European Central Bank held interest rates steady, but Mario Draghi surprised currency markets by saying that the central bank is ready to increase quantitative easing if necessary. The euro has jumped more than 6% against the dollar this year, in part because higher inflation expectations in the eurozone have strengthened the case for removing monetary accommodation.

Following Draghi's dovish statement, the euro slid while the dollar rallied 0.3% against major rivals. Also supporting the buck, uncertainty over this week's snap election in the UK sent the pound lower by nearly 0.4%. If her Conservative Party loses seats, PM Theresa May will be disadvantaged in the upcoming Brexit negotiations, perhaps to the detriment of the British economy.

Former FBI Director James Comey's testimony before Congress today had little net impact on gold prices. Comey offered little additional information on the FBI's probe into former National Security Advisor Mike Flynn's involvement with Russia. Gold initially slipped further as the absence of evidence of President Trump's involvement boosted the dollar and equities, but it then recovered in recognition that the cloud over his administration has not lifted.

A rising dollar weighs on gold and other commodities by making them more expensive overseas. The other precious metals were mixed, with silver and platinum dropping 1.2% and 1%, respectively, while palladium rose 2.2%.

At the Comex close: August gold fell $13.70 to $1,279.50; July silver lost 20 cents to at $17.41; July platinum slid $9.50 to $938.10; and September palladium rose $18.30 to $846.50 an ounce.