AGE Daily Gold Update

AGE Daily Gold Update presents a recap on today's action in the precious metals markets. View archives.

3/19/2019: Gold gains on dovish rate view

Source: Bill Musgrave, American Gold Exchange

Austin — Gold gained 0.4% to close above $1,306 as expectations for a dovish Fed rate view pressured the dollar, boosting demand for alternative stores of value.

Beginning its two-day meeting on monetary policy today, the Federal Reserve is widely expected to keep rates unchanged and reinforce its patient stance on future rates hikes. Most Fed officials, including Chair Jerome Powell, have recently stated that slowing global growth and softer inflation are reasons to adopt a wait-and-see approach.

The dollar fell back 0.2% against major rivals as traders speculated that the future course of rate policy may, in fact be toward cuts instead of raises. Fed fund futures traders are pricing in a 15% probability of a rate decrease by December. Flat or lower rates would remove a substantial support for the dollar, which would be bullish for gold as it becomes less expensive overseas when the dollar weakens.

Also pressuring the buck, factory orders rose a mere 0.1% in January, well-short of forecasts, in another sign that GDP has slowed in the first quarter. The Atlanta Fed forecasts 0.4% real GDP growth.

The other precious metals were also higher, with silver adding 0.3% while platinum and palladium rose 2.2% and 0.8%, respectively.

At the Comex close: April gold gained $5 to $1,306.50; May silver added 5 cents, to $15.37; April platinum jumped $18.60 to $852.60; and June palladium rose $12.20 to $1,551.90 an ounce.