Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold rose 0.6% to close at a 14-month high above $1,350 after dovish comments from the European Central Bank reinforced the view that the Federal Reserve will lean toward lowering interest rates in coming months.

Speaking in Portugal, ECB President Mario Draghi sad today that lower interest rates and more quantitative easing are both on the table for the Eurozone, perhaps as early as next month, if economic conditions continue to deteriorate. Along with negative interest rates, QE would lower the value of the euro.

President Trump responded with an aggressive tweet accusing the ECB of cheapening its currency to create an advantage in trade. He also took aim at Jerome Powell as the Fed met to plan monetary policy, criticizing the Fed Chair once again for keeping rates too high.

With the US engaged in various trade wars and economic data softening, traders have been anticipating that the central bank may signal a disposition to lower interest rates, if not at this meeting then soon. The dovish turn by the ECB reinforced this view by setting the stage for additional easing in other major economies to combat slowing global growth.

Higher interest rates over the past three years have created substantial headwinds for gold by boosting the relative strength of the dollar. Lower rates would be bullish for the metal by making it less expensive in other currencies.

The other precious metals were also higher, with silver adding 1.1% while platinum and palladium climbed 0.9% and 1.2%, respectively.

At the Comex close: August gold rose $7.80 to 1,350.70; July silver added 16. cents, to $14.99; July platinum gained $7.40 to $802; and September palladium picked up $17.80 to $1,473.30 an ounce.