Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold edged up 0.1% to close just under $1,273, and then more than doubled that gain after hours as the Fed signaled that interest rates will remain lower for longer than previously thought.

In the policy statement released at the end of its two-day meeting, the central bank suggested that rates may rise at a slightly little faster pace beginning next year, but the ceiling for long-term rates will be lower than previously stated. Low interest rates support higher gold prices in part by weakening the dollar and diverting investors from cash and bonds toward alternative stores of value.

While voicing optimism for the economy in the second half of the year, the Fed nonetheless slashed its growth forecast from 2.9% to around 2.2%, and notably did not alter its forecasts for employment or inflation this year, despite rising payrolls and a big jump consumer prices in May. As expected, bond-buys were reduced by another $10 billion to $35 billion per month�still a huge amount of monetary stimulus.

The dollar initially rose on the day but then swung to losses after the Fed statement, supporting precious metals and other commodities denominated in dollars for international trade. U.S. equities jumped, with the S&P 500 adding nearly 0.8% to close at a new record high. The other precious metals tracked gold higher.

At the Comex close: August gold edged up 70 cents to $1,272.30; July silver picked up 5 cents to $19.78; July platinum climbed $7.70 to $1,450.80; and September palladium picked up $5.95 to $822.65 an ounce.