Gold News & Info

Source: Bill Musgrave, American Gold Exchange

Austin— In regular trade, gold slipped 0.4% to close under $1,116 as traders braced for the release of the Federal Reserve's policy statement at the conclusion of its two-day meeting. The metal then abruptly swung 1% higher electronic trade, surging to as high as $1,128 after the central bank signaled a dovish disinclination to raise interest rates again soon.

In its post-meeting statement, released 30 minutes after Comex trading closed, the Fed left interest rates unchanged, as expected, while acknowledging that the economy has "slowed" since its last meeting, when it voted to raise rates for the first time in nine years. It also underscored concerns about inflation, saying it is expected to remain "low in the near term."

Implicitly recognizing the contagion risks presented by China's slowing economy and faltering stock market, which has plunged more than 22% so far this year, the Fed said it would be closely monitoring "global economic and financial developments." Importantly, assurances that risks to the economy remain "in balance," present in the December statement, were omitted today.

The dollar weakened and Treasury yields plummeted after the release as traders speculated that the Fed is now very unlikely to raise interest rates in March. The CME FedWatch tool, which calculates the odds of rate increases based on Fed fund futures contracts, pushed the next hike out to July after the statement's release.

The other precious metals were mixed, with silver and platinum slipping 0.7% and 0.6%, respectively, while palladium added 1.9%.

At the Comex close: February slipped $4.40 to $1,115.80; March silver slid 10 cents to $14.50; April platinum fell $5.20 to $882.10; and March palladium added $9.50 to $502.25 an ounce.