Gold News & Info

Source: Bill Musgrave, American Gold Exchange

Austin— Gold surged 4.5% to close above $1,247, the highest finish in more than a year, as investors fled to safety from the deepening global rout in equities. It was the metal's biggest one-day gain since late 2013.

Stocks worldwide fell deeply into the red, with the Dow and Global Dow both dropping around 1.7%, as financial markets came under stress after Sweden cut interest rates deeper into negative territory, undermining the ability of banks to profit from the spread between borrowing costs and lending returns. Financials led the plunge on Wall Street by dropping more than 3%.

The Dow has now lost around 10% this year while gold has gained 17%.

Speaking to the Senate today, Fed Chair Janet Yellen said she would not take negative rates "off the table" as a policy tool "if the Fed needs to assist the economy." The statement took U.S. markets by surprise and deepened concerns that the recovery may losing momentum. Treasury yields plunged to the lowest level since August 2012.

The dollar fell again, hitting a 15-month low against the safe-haven yen, as speculation increased that the Fed will not raise interest rates until next year. The futures market in federal finds shows traders projecting the next hike in February 2017, with a slight chance of a rate cut this year. A falling dollar typically boosts gold and other commodities by making them less expensive overseas.

According to the World Gold Council's Gold Demand Trends, investment demand for gold grew by 8% in 2015, to more than 878 tonnes, while jewelry demand, after a weak first half of the year, rebounded to its highest level in 11 years in the second half. And central banks continued to diversify their currency reserves by purchasing more than 588 tonnes, slightly more than in 2014.

The other precious metals were mostly higher, with silver and platinum jumping 3.4% and 3.1%, respectively, while palladium slipped 0.1%.

At the Comex close: April gold surged $53.20 to $1,247.80; March silver jumped 51 cents to $15.79; April platinum gained $29 to 963.20; and March palladium dipped 25 cents to $524.45 an ounce.