Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold slipped 80 cents to close just under $1,236 before dropping an additional $5 per ounce to $1,231 after hours following the release of a mixed policy statement at the conclusion of this week's FOMC meeting.

The Fed reiterated that interest rates will be held near zero for a "considerable time" after the bond-buying program known as quantitative easing ends in October. Traders were concerned that any change in this language could signal a new disposition to raise rates sooner than expected, which would weigh on the gold price by boosting the dollar. That no change was made to this phrasing was widely viewed as a dovish sign.

As in its July statement, the Fed also noted that the economy is expanding at a "moderate" rate and the improving job market belies "significant underutilization" of labor resources. In a potentially significant change, the new statement cited inflation as "running below the committee's longer-term objective," whereas in July it said inflation was "somewhat closer" to the goal. Coincidentally, data released today showed that consumer prices fell in August for the first time in sixteen months. Low inflation gives the Fed leeway to keep interest rates lower for longer.

However, the Fed also conveyed a more hawkish tone by raising its median estimate for the federal funds rate at the end of 2015 from 1.125% to 1.375%, meaning steeper increases once they begin. This change in forecast lifted the dollar against most major rivals, pressuring gold and other commodities denominated in it for international trade by making them more expensive to overseas buyers.

The other precious metals tracked lower with gold. September silver lost 9 cents to $18.75; October platinum gave up $9.50 to $1,357.80; and December palladium lost $4.95 to $836.60 per ounce.