Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.2% to close above $1,997 ahead of the conclusion of the Fed’s two-day meeting on monetary policy. The metal then surged nearly 2%, pushing above $2,032 in electronic trading, after the Fed signaled its intention to reduce interest rates in 2024.

As expected, the Fed kept interest rates unchanged at 5.25% to 5.5%. Unexpected, however, was the dovish forward guidance accompanying the decision. A near- unanimous 17 of 19 officials are projecting rates will be lower by the end of next year, with the median projection of 75 basis points in cuts, to 4.5% to 4.75%.

The most aggressive rate-hike cycle in a generation is apparently over and the great unwinding is about to begin. And that is bullish for gold.

As if to underscore the Fed’s decision, US producer prices were unexpectedly flat in November, pointing to lower consumer inflation in the pipeline. The increase in wholesale inflation over the past year fell to 0.9% from 1.2% the previous month.

Benchmark 10-year Treasury yields fell sharply on the policy pivot to just above 4%, boosting gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset. The dollar tumbled nearly 1%, lifting gold and other commodities by making them cheaper overseas.

The other precious metals were lower before but sharply higher after the Fed decision. Silver fell 0.3%, then jumped 4.5% to $23.92; platinum shed 1%, then surged 2% to $940; and palladium dropped 1.3% before climbing 3.1% to $1,000 an ounce.

At the Comex close: February gold gained $4.10 to $1,997.30; March silver lost a dime to $22.91; January platinum slid $8.90 to $922.10; and March palladium dropped $13.10 to $969.20 an ounce.