Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Washington— Gold rose 0.2% to close regular trading at just under $1,209, then doubled that gain in electronic trade, rising as high as $1,211, after the release of minutes from the last FOMC meeting signaled a disinclination to raise interest rates in June.

The transcript from the April meeting, released after the Comex close, revealed a growing consensus within the Fed that the economy is still too weak to raise rates. While reserving the option for a June hike, "many participants . . . thought it unlikely that the data available in June would provide sufficient confirmation" that the criteria for a hike had been met.

One month earlier, "several members" were advocating for a June hike. But moribund 0.2% growth in Q1 and a series of weak economic reports in Q2 have all but silenced that call. Some participants are even questioning "whether the Committee was providing sufficient accommodation at the present time" to promote recovery. Economic worries in Greece and China were mentioned as additional reasons to delay "policy firming in the near future."

The dollar gained early in the session on safe-haven inflows after Greece warned that it is likely to miss a 300 million euro debt payment in June unless more aid is forthcoming from EU lenders. Some of those gains evaporated after the minutes' release. An earlier hike would support the greenback in forex trading against rival currencies, which would pressure gold and other commodities denominated in it for international trade by making them more expensive for buyers overseas.

The other precious metals tracked higher with gold during and after the session. Silver gained more than 0.5% while platinum picked up 0.6% and palladium nearly 0.4%.

At the Comex close: June gold rose $2 to $1,208.70; July silver gained 4.2 cents to $17.11; July platinum picked up $6, to $1,156.90; and June palladium added $1.70, to $776.85 an ounce.