Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold dipped 0.3% to close under $1,988 ahead of the Fed’s decision on interest rates. It then bounced back above $1,991 in electronic trade after traders heard Fed Chair Jerome Powell’s post-meeting comments as slightly less hawkish than expected.

As was almost universally expected, the Fed left interest rates unchanged for a second straight meeting, stranding them for now at a 22-year high between 5.25% and 5.5%.

The accompanying policy statement left the door slightly open to future rate hikes, citing “surprising strength” in the US economy. But it also acknowledged the “tighter financial conditions” affecting businesses and households, and the Fed's concern about damage to the economy.

Powell himself also leaned slightly dovish in his post-meeting presser, if only because he did not sound as assertively hawkish as in recent statements. He refrained from his “higher for longer” mantra and mentioned the committee is not yet thinking about cutting rates—which suggests rate cuts may soon be on the table.

Benchmark 10-year Treasury yields retreated under 4.75% as traders speculated that the Fed is more than likely finished with rate hikes. The odds of a December increase fell to 17% from 29% yesterday, and bets increased on a rate cut by June.

Some down data added to the softer rate view. ADP reported only 113,000 new jobs were added to the private sector in October, while the ISM reported US manufacturing activity fell deeper into the negative.

The dollar slipped from small gains to small losses after the Fed decision, helping gold’s rebound by making it cheaper in other currencies.

The other precious metals were lower, with silver sliding 0.7% while platinum and palladium fell 1.5% and 1.1%, respectively.

At the Comex close: December gold slipped $6.80 to $1,987.50; December silver slid 16 cents to $22.79; January platinum dropped $14.50 to $930.40; and December palladium shed $11.90 to $1,114.20 an ounce.