Gold News & Info

Source: Bill Musgrave, American Gold Exchange

Austin— Gold jumped 1.3% to close at a seven-week high above $1,266 after the Bank of Japan left interest rates unchanged, causing the dollar to plunge against the yen and boosting demand for alternative stores of value. Silver soared 1.5% to an 11-month high of $17.59.

The BOJ shocked global markets by standing pat on monetary policy at its April meeting, defying widespread expectations of deeper stimulus. Weak domestic consumption, slowing global demand, and the recent strength of the yen have been creating serious headwinds for Japan's fragile recovery, and core consumer fell to minus 0.3% in March, signaling deflation.

Coming one day after the Federal Reserve held U.S. rate unchanged, the BOJ decision caused the yen to spike 3% higher against the dollar for its biggest one-day gain in eight months.

The dollar fell against other major rivals, too, with the ICE Dollar Index dropping another 0.6% to its lowest level since last August. A weaker dollar boosts gold and other commodities by making them less expensive to users of other currencies.

The U.S. economy grew at its slowest pace in two years during the first quarter, with GDP increasing by merely 0.5%, according to government figures released today. Growth has now decreased for four straight quarters.

Platinum and palladium metals also gained sharply, rising 2.5% and 2.4%, respectively.

At the Comex close: June gold jumped $16 to 1,266.40; July silver soared 25 cents to $17.59; July platinum climbed $25.30 to $1,050.70; and June palladium added $14.70, to $624.35 an ounce.