Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold rallied another 1.3%, closing at a two-week high near $1,185, as a falling dollar spurred demand for alternative stores of value. The metal finished 2.8% higher for the week, notching its biggest weekly gain in two months. Silver did even better, gaining 4.8% today and 9% this week.

Tracked against a basket of major rivals, the dollar tumbled 1.3% today and 2.2% this week, undercut by speculation that the Federal Reserve will raise interest rates more slowly than previously thought. A falling dollar supports higher prices for gold and other commodities denominated in it for international trade by making them less expensive to foreign buyers.

At the close of its two-day meeting on Wednesday, the Fed indicated that it is likely to hold interest rates low for longer than many traders were expecting. This surprising shift toward further accommodation came in response to slower growth, falling inflation, and a much stronger dollar, which weakens U.S. competitiveness abroad.

Although its new policy statement removed assurances about remaining "patient" before the first rate hike since 2006, the Fed softened the meaning by stating that this change "does not indicate that the Committee has decided on the timing of the initial increase in the target range." In her press conference afterwards, Chair Janet Yellen reassured the markets by saying that she is not impatient to tighten policy.

The other precious metals tracked gold higher, with silver leading the way. Platinum gained 1.9% today and 2.3% this week; palladium rose 1.7% but ended the week down 1.2%.

At the Comex close: April gold rallied $15.60 to $1,184.60; May silver jumped 77 cents to $16.88; April platinum gained $21.60 to $1,141.20; and June palladium rose $13.30 to $779.10 an ounce.