Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.3% to close near $1,820 as investors shifted into safe-haven assets ahead of the conclusion of the Fed’s two-day meeting on monetary policy. The metal held those gains and rallied above $1,834 in electronic trading after the central bank opted for an aggressive rate hike.

As expected, the Federal Reserve raised rates by 75 basis points to between 1.5% and 1.75%, signaling a hawkish new stance toward fighting the strongest inflation in 40 years. It was the biggest single hike in almost three decades.

In addition, the central bankers said they plan to continue raising rates throughout this year and next, targeting around 4% by the end of 2023. The stated goal is to bring inflation back down to 2%. The target rate will be adjusted, the Fed said, if risks emerge that would “impede” reaching this inflation goal.

US retail sales fell 0.3% in May, the first drop in five months. With consumer spending accounting for around 70% of GDP, retail sales are considered a weathervane for the direction of the economy.

Benchmark 10-year Treasury yields fell back under 3.35% before the Fed announcement and remained around this level after it as investors shifted toward safety, concerned that aggressive rate hikes will tip the economy into recession.

The dollar also retreated, dropping 0.3% against major rivals as the huge rate hike was largely priced into Forex markets already.

A weaker dollar lifts gold and other commodities by making it cheaper in other currencies. Falling yields support gold by decreasing the opportunity costs for holding it instead of bonds as a safe-haven asset.

The other precious metals were also higher, with silver rising 2.2% while platinum and palladium picked up 1.5% and 3%, respectively.

At the Comex close: August gold rose $6.10 to $1,819.60; July climbed 47 cents to $21.42; July platinum picked up $13.90 to $924.60; and September palladium jumped $54.10 to $1,834 an ounce.