Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold dipped 0.1% to close near $1,354 in regular trading ahead of the conclusion of the Fed's meeting on monetary policy. It then jumped 0.7% in electronic trading to reach $1,360 after the central bank signaled its willingness to cut rates later this year.

As expected, the Federal Reserve left interest rates unchanged, saying in its post-meeting statement that the job market "remains strong" and the economy continues to expand at a "moderate" pace.

However, the Fed's statement also opened the door for rate cuts in coming meetings. Citing softer inflation and growing "uncertainties" in the economy, the central bank dropped its previous stance of being "patient" in adjusting rates, promising instead to "act appropriately to sustain the expansion." The so-called dot plot, giving forward guidance on rate policy, shows half of the committee projecting two cuts this year.

The dollar fell sharply after the dovish statement, dropping 0.4% against major rivals, and Treasury yields fell. Lower rates pressure the buck by discouraging forex investments seeking higher yield, boosting gold and other commodities in turn by making them less expensive on other currencies.

Gold's post-Fed gains were capped by a strong rally in stocks as traders speculated that cheaper money may boost growth and corporate profits. The Dow and Nasdaq both rose 1.4% while the S&P 500 added 1%.

The other precious metals were mixed before and higher after the Fed statement. Silver went from a loss of 0.2% to a gain of 0.6%. Platinum extended its daily gain from 0.5% to 1%, and palladium went from a rise of 1.3% to 1.5%.

At the Comex close: August gold dipped $1.90 to $1,348.80; July silver dropped 4 cents to $14.96; July platinum added $3.80, to $805.80; and September palladium jumped $19.30 to $1,492.60 an ounce.