Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold fell 1.2% to close under $1,830 as traders took profits from yesterday's rally to a two-month high. The metal then retreated to $1,816 in electronic trade after the Fed signaled its intention to raise rates and end monetary easing in March.

As was widely expected, the FOMC's policy statement at the conclusion of its two-day meeting laid the groundwork for a rate hike at mid-March meeting. Citing "solid" gains in the labor market, the committee also agreed on "significantly reducing" the central bank's $9 trillion balance sheet soon thereafter.

The reality of approaching rate hikes pressured US equities to minor losses while driving benchmark 10-year Treasury yields sharply higher to more than 1.87%. Rising yields weigh on gold by increasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar also rallied, picking up 0.6% as Forex traders looked ahead to the rate-differential against other major currencies, which are expected to be slower to raise rates. A stronger dollar weighs on gold by making it more expensive overseas.

Gold continues to be supported by 7% annual inflation, higher oil prices, and rising geopolitical tensions.

WTI crude jumped another 1.7% to more than $87 per barrel as the United Arab Emirates weighs its response to recent missile attacks by Iran-backed Houthi rebels, adding uncertainly to Middle East supply lines. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

Russia's Vladimir Putin today threatened "retaliatory measures" if the US and its allies do not submit to his demands that ex-Soviet nations like Ukraine are prohibited from joining NATO. Russia has more than 100,000 troops and heavy weapons massed on the Ukraine border to make good on its threat.

The other precious metals were mixed, with silver dropping 0.4% before and 1.3% after the Fed meeting. Platinum closed 2% before surrendering half of that gain after hours. Palladium rose 7.4% on worries that the brewing Ukraine conflict would interrupt Russian supplies of the metal.

At the Comex close: February gold fell $22.80 to $1,829.70; March silver slipped 9 cents to $23.81; April platinum added $20.40 to $1,045.90; and March palladium jumped $161.70 $2,350.60 an ounce.