Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold rocketed 3.6% to close near $1,397, its highest level in nearly five years, as sharply higher oil prices and yesterday's the Fed's dovish rate view drove investors into alternative stores of value. It was the metal's biggest one-day jump in three years.

At yesterday's conclusion to its two-day meeting, the Federal Reserve issued a statement turning away from its "patient" policy about interest rates, signaling instead that lower interest rates may be coming soon. Responding to falling inflation and increasing economic "uncertainties," perhaps alluding to our trade war with China, the central bank vowed to take measure "to sustain the expansion."

The dollar fell 0.5% against major rivals, tallying the biggest two-day drop in a year, as traders speculated that the Fed will lower interest rates next month. CME FedWatch places the odds a quarter-point or half-point rate cut at 99% for the July meeting, based on Fed-funds futures trading.

The Fed's consistent program of raising of rates over the past three years has kept the dollar strong, creating substantial headwinds for gold by making it more expensive in other currencies. Lower interest rates would likely weaken the buck and support higher gold prices.

Sharply higher oil prices also fueled gold's dramatic rise after Iran shot down a US drone, adding to worries that a military confrontation between the two nations would curtail global oil supplies. WTI crude soared 5.4% to almost $56.70. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were mixed, with silver surging 3.6% while platinum edged down slightly, and palladium lost 0.8%.

At the Comex close: August gold rocketed $48.10 to $1,396.90; July silver jumped 53 cents to $15.49; July platinum dipped 20 cents to $805.60 an ounce and September palladium dropped $12 to $1,480.60 ounce.