Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold gained 0.5% to close at a three-week high above $1,308 despite a rising dollar as traders digested the outcomes from this week's meetings on monetary policy by Fed and ECB. Growing trade-war worries also sent investors toward safe havens, boosting demand for gold.

The European Central Bank declared its intention today to end quantitative easing by December, removing the primary stimulus that has supported the EU economy since the financial crisis of 2008. At the same time, the ECB pledged to hold interest rates unchanged until mid-2019.

On it own, the cessation of QE would be bullish for the euro. Tantamount to printing money, QE has flooded the Eurozone with cheap euros to help spur commerce and investment, driving down its value. But the accompanying decision to maintain ultra-low interest rates for another year overrode any upside momentum for the euro, driving its biggest one-day slide in eight months as foreign exchange trades sought other currencies, like the dollar, with the promise of higher yields.

The dollar rallied strongly on the ECB move, jumping 1.3% against the euro and 0.9% against a basket of rivals, on expectations that the Fed may accelerate the pace of rate hikes. At the end of yesterday's Fed meeting, the US central bank suggested it may hike four times this year instead of three, which would further increase the rate differential between the dollar and euro.

That gold rallied despite a stronger dollar is bullish for the metal, signaling pent-up demand caused in part by growing worries about global trade. The Trump administration said today that it is preparing to levy up to $50 billion in tariffs on China as early as Friday. In addition, the US will impose stiff duties on imports from Canada, Mexico, and the EU. All trading partners have threatened retaliatory measures.

The other precious metals were mostly higher, with silver and platinum rising 1.6% and 0.9%, respectively, while palladium dipped 0.1%.

At the Comex close: August gold gained $7 to $1,308.30; July silver jumped 27 cents to $17.26; July platinum rose $8.40 to $910.90; and September palladium edged down 60 cents to $1,006.60 an ounce.