Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold surged 1.9% to close above $1,798 as the dollar and Treasury yields weakened after this week's Fed meeting, lifting alternative stores of value. It was the metal's highest finish in more than three weeks.

As expected, the Federal Reserve voted to accelerate the removal of emergency monetary stimulus, planning to end the pandemic-era program by March. In addition, the central bankers have penciled in three quarter-point rate hikes next year to combat the strongest inflation in 40 years.

While the prospect of higher interest rates will typically lift yields and the dollar, both have fallen in the aftermath of the Fed's announcement as traders realized that the change in policy is barely more hawkish than expected and had already been priced into the market.

At the same time, other central banks became more hawkish at meetings this week. Despite the omicron variant and its potential impact, the Bank of England announced a surprise rate hike yesterday, the first major central bank to do so in the covid era. And the ECB reaffirmed its intention to end its pandemic stimulus program, known as the PEPP, by March.

The dollar fell 0.5% against major rivals as traders speculated that interest-rate differentials between the US and major economies might not give it as much advantage as previously expected. A weaker dollar lifts gold and other commodities by making them less expensive in other currencies.

Benchmark 10-year Treasury yields pulled back under 1.43% on the rate-differential re-calibration and growing concerns that the omicron variant could disrupt the global recovery. Falling yields support gold by decreasing the opportunity cost for holding it instead of bonds as a safe-haven asset.

Higher oil prices also gave gold a tailwind. WTI crude rose 2.1% to a three-week high just under $72.40 per barrel on EIA data forecasting "blockbuster demand" and shrinking inventories. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were also sharply higher, with silver rising 4.4% while platinum and palladium rallied 3.9% and 11%, respectively.

At the Comex close: February gold gained $33.70 to $1,798.20; March silver added 94 cents, to $22.49; January platinum picked up $34.70 to $928.90; and March palladium jumped $171.20 to $1,722.80 an ounce.