Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold edged slightly higher in regular trade, adding 30 cents to close at $1,315.50 for its fourth straight winning session. The metal then surged as high as $1,328 in electronic trade on dovish comments from the Federal Reserve.

The Fed left interest rates unchanged, as expected, and left open the possibility that its next move could be lowering rates. In his post-meeting presser, Fed chief Jerome Powell said the argument for further rate increases "has weakened," and the FOMC will be "patient" before deciding its next action. Language pledging "further gradual increases" in rates was removed from the official statement for the first time since 2015.

The dollar plunged immediately after the Fed statement, losing 0.5% against major rivals on widespread expectations that the next rate hike, if it comes at all, won’t happen until June. Seven rate hikes over the past two years have been a pillar of support for the dollar, keeping a lid on the gold price by making it more expensive in other currencies. The Fed's new dovish stance is likely to change that dynamic, weakening the buck and boosting gold.

Stocks also rallied on the dovish turn, with the Dow rallying 1.6% and the Nasdaq 2.1%. Lower interest rates support corporate growth by encouraging capital expenditures, building profits and asset values. ADP's data showing 213,000 private-sector jobs were added in January also spurred risk appetite.

Also supporting gold, oil jumped 1.8% to a two-month high above $52 per barrel on US sanctions against Venezuela and smaller-than-expected increases in domestic stockpiles. Gold often trades in sympathy with oil as a hedge against energy-related inflation.

The other precious metals were also higher, with silver rising 0.5% while platinum and palladium climbed less than 0.1% and 1%, respectively.

At the Comex close: April gold added 30 cents, to $1,315.50; March silver rose 9 cents to $15.27; April platinum picked up 40 cents to $816.20; and March palladium climbed $12.80 to $1,316.40 an ounce.