Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold gained for a third session, adding 0.2% to close above $1,970, on weak retail data and expectations of a dovish outcome to the FOMC meeting on monetary policy. The metal than pushed above $1,974 in electronic trade after the Fed pledged to keep interest rates near zero for at least three years.

US retail sales slowed for the third straight month, rising by 0.6% in August, as consumers hit the brakes on spending because of COVID-19 resurgence and fading fiscal stimulus. So-called core sales, a closer measure of the consumer spending portion of GDP, fell 0.1%.

The weaker sales data is the latest report signaling a slowdown in the initial recovery from coronavirus lockdowns last spring. Manufacturing and job growth also faltered in August while new filings for jobless benefits rose sharply, suggesting another round of layoffs. Nearly 30 million Americans are now on unemployment.

In the statement following its two-day meeting, the Fed said it will keep interest rates near zero until the end of 2023, and even longer if necessary, to return conditions to "maximum employment."

In keeping with its new policy framework announced last month, the central bank also said it will let inflation "moderately exceed 2% for some time," all but ensuring that real interest rates (rates adjusted for inflation) will remain negative for years to come.

The dovish Fed stance on rates and inflation is bullish for gold, which thrives when real yields are low or negative because they eliminate an opportunity cost for holding the metal, which offers no yield itself. And gold is often sought by investors during periods of rising inflation as a hedge against loss of purchasing power.

The other precious metals were mostly higher, with silver edging up less than 0.1% while platinum slipped 0.9% and palladium rose 0.1%.

At the Comex close: December gold gained $4.30 to $1,970.50; December silver added one cent, to 27.48; October platinum dropped $8.70 to $973.50; December palladium rose $3.10 to $2,417.60 an ounce.