Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold first gained 0.3%, closing above $1.151 in the regular session, as traders shifted out of the dollar before the release of the Fed's policy statement. The metal then surged more than 1.3% to as high as $1,172 in electronic trade immediately following the release, driven by evidence that the central bank seems in no hurry to raise interest rates.

Recognizing that "economic growth has moderated" and "inflation has declined further," the Fed's statement emphasized caution, saying the first rate increase will come only "when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2% objective."

Language about remaining "patient" was removed, as expected, but the Fed softened the possible effect of this change by stating explicitly that the alteration "does not indicate that the Committee has decided on the timing of the initial increase in the target range."

Equities spiked higher while the dollar tumbled more than 1% after the release as traders saw the likelihood of the first hike receding from June until September or later. A weaker dollar supports higher prices for gold and other commodities by making them less expensive to users of other currencies.

The other precious were mixed during the session and higher after the close. Silver finished down 0.2% and then erased that loss after hours. Platinum dipped 0.1% but then rebounded 1.6% after hours, while palladium gained 0.3% before adding another 1.2% after hours.

At the Comex c lose: April gold gained $3.10 to $1,151.30; May silver slipped 4 cents to $15.54; April platinum slid $1.10 to $1,092.60; and June palladium added $2.50, to $764.65 an ounce.