Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold surged 1.3% to close at a one-week high above $1,855 as improving prospects for new fiscal stimulus pressured the dollar ahead of the Fed's meeting on monetary policy, lifting demand for alternative stores of value.

Congress appears poised finally to pass a long-awaited pandemic aid bill. The new proposal will focus on a $748 billion package that extends, while scaling down, many of the popular aspects of the $1.7 trillion CARES Act from March. New assistance for state and local governments, a major sticking point for Republican lawmakers, will be negotiated in a separate $160 billion bill.

The new aid package is considered crucial by many economists to prevent the economy from sliding back toward recession in the critical months before vaccines are widely distributed.

Against this backdrop, the Fed meets today for its last review of monetary policy for the year. While no changes to interest rates are expected, traders speculate that the central bankers will lean further into quantitative easing by extending the maturities of the bonds currently being purchased to provide liquidity to the markets.

Like monetary easing from the Fed, fiscal stimulus is bullish for gold because it floods the economy with new money, increasing the risk of inflation and currency devaluation. The dollar fell 0.3% against major rivals, adding support to gold by making it less expensive overseas.

Gold's gains came despite sharply higher equities, which also rallied on the prospect of additional fiscal stimulus. All three major US indexes added 1%.

The other precious metals were also higher, with silver jumping 2.5% while platinum and palladium added 2.3% and 0.2%, respectively.

At the Comex close: February gold surged $23.20 to $1,855.30; March silver climbed 60 cents to $24.64; January platinum gained $23.70 to $1,039.30; and March palladium added $5.10, to $2,324 an ounce.