Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold ended the trading session with a 0.5% gain before falling to a 0.6% loss in electronic trade after Fed Chair Ben Bernanke told reporters that the central bank may begin tapering purchases of long-term bonds, known as quantitative easing, later this year. Following this week's two-day meeting of the FOMC, Bernanke said the Fed sees headwinds diminishing for the economic recovery. If data continue to be broadly positive, he expects quantitative easing to end by mid-2014. Interest rates are expected to remain unchanged until 2015.

The dollar immediately rallied on the Fed comments, pressuring gold into negative territory. QE has supported higher gold prices because it devalues the dollar and increases the risk of long-term inflation. Stocks fell sharply, with the Dow dropping by 200 points and the S&P 500 losing 1.4%. The other precious metals also fell. Further weakness is expected in metals and commodities as traders reposition for a stronger dollar. Silver closed the session down 0.2% and then fell another 2.1% after hours. Platinum and palladium closed down 1.1% and 1.7%, respectively, before dropping another 0.7% and 0.3% after hours.

At the Comex close: August gold rose $7.10 an ounce to $1,374; July silver fell 6 cents to $21.62; July platinum dropped $16.10 to $1,423.90; September palladium lost $11.95 to $696.40 an ounce.