Gold rallies fast after dipping to $726.55 ahead of Fed interest-rate minutes
From Chris Mullen at GoldSeek.com...
Gold Prices traded lower in Asia on Tuesday and fell as low as $726.55 in London ahead of the US open, but the Gold Market then rallied for the next 5 hours and traded as high as $740.60 – just shy of Monday's start – before drifting into the close and ending with a gain of 0.56%.
The Dow and S&P indices meantime rose to new record highs, and the Nasdaq also found nice gains after the release of minutes from the US Federal Reserve's latest policy meeting indicated to Wall Street they may continue to cut interest rates at future meetings.
The only major economic news of the day, the Fed's minutes – released six hours after the Gold Market's sharp bounce had begun – showed unanimous agreement in the decision to cut rates by 50 basis points at their last meeting.
Perhaps most significant in the minutes was the complete lack of concern for inflation shown by Fed members. They had emphasized inflationary risks just a few months earlier.
Crude oil also turned higher after a US government prediction for strong demand in response to a forecast for a colder winter ahead, while the US Dollar index fell after the Fed’s minutes made it seem more likely the US central bank will continue to cut interest rates.
Silver dropped to as low as $13.12 in London and then rose as high as $13.56 in New York before ending with a gain of 1.51%. Gold Priced in Euros rose above €523, platinum gained $14 to $1367, palladium gained $2 to $362, and copper fell to about $3.61.
Gold and silver mining equities steadily rose throughout US trade and ended with nearly 3% gains.
Treasury bonds erased early gains after the Fed’s minutes, despite the outlook for lower interest rates. Bond traders seemed more concerned about the Fed’s abandonment of their previously perceived fight against inflation.
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