Gold News

Gold Adds 1% as Fed Stays "On Hold" with Rates and Bond Purchases

From Chris Mullen at

Gold and silver both saw slight losses in Asia on Wednesday and then decent gains in London before they exploded higher early in New York trade to reach as high as $941.30 and $14.10 per ounce respectively.

Both silver and Gold Prices then fell back off into the close, gold ending with a gain of 1.1% while silver closed out with a gain of 0.4% on the day.

The Gold Price in Euros recovered to €667 an ounce.

Gold Mining and silver equities rose about 4% by late morning in New York before they fell off, only to rally back into the close and end with about 3% gains on the day.

Platinum gained $5.50 to $1162, and copper gained seven cents to about $2.27, while crude oil erased early losses and saw gains at midday.

New data showed US crude inventory stockpiles falling a surprisingly large 3.8 million barrels last week, but a larger than expected build of 3.9 million barrels of gasoline – and an increase of 2.1 million barrels in distillate inventories – tempered the energy sector's price gains later in the day, and oil ended slightly lower for the session.

The US Dollar index saw decent gains as the Federal Reserve's June statement was not quite as dovish as some had expected.

The Fed held interest rates in their target range of 0%-0.25% and said they will remain there for an extended period of time, as expected. The only real change in the statement was the removal of their worry about deflation, and they did not announce any further plans to buy more bonds than previously announced and did not telegraph when they may start to raise interest rates again as some had hoped for.

Treasuries saw slight gains after a successful debt auction, but they then fell back off after the Fed announcement.

The Dow, Nasdaq, and S&P traded mostly slightly higher in morning trade before the Dow turned lower following the Fed's statement. The Nasdaq and S&P still closed with gains while the Dow ended only marginally lower.

US Durable Goods Orders showed a 1.8% rise for May, repeating April's rise and denying analyst forecasts for a fall. New Home Sales ticked lower.

Thursday at 08:30 EST brings Initial US Jobless Claims for last week, first quarter GDP expected down 5.7%, Personal Income for May expected at 0.2%, and Personal Spending expected up.

Just before 10:00 EST comes the Michigan Sentiment Index for June, expected at 69.0.

Chris Mullen is chief content manager of the GoldSeek family of websites, a leading source of gold news, comment and mining-stock data for private and institutional investors.

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